Credit ratings agency Moody's Investor Service on Wednesday cut its 2020 outlook for global auto sales, with China taking the biggest hit as the coronavirus outbreak worsens.
The agency, in a Wednesday statement, said it expects global auto sales to fall 2.5 percent in 2020, more than its previous estimate of about 0.9 percent drop.
Moody's retained a "negative" outlook on the sector and said it expects global sales to rebound only modestly in 2021 with growth of 1.5 percent.
The agency now expects auto sales in China, the world’s largest market, to fall 2.9 percent in 2020 from previous estimates of 1 percent growth.
Meanwhile, LMC Automotive said it’s evaluating scenarios, and said it could imagine a fall of 3 million to 4 million light-vehicles, from a total of about 90 million last year. That’s a retrenchment of as much as 4.4 percent.
“This is not our core scenario, but it does appear to be a reasonable assumption to switch to, if things get worse,” LMC said in a research note.
A report last week from the China Passenger Car Association said car sales plunged 92 percent during the first two weeks of February. The association said sedan sales dropped another 83 percent last week.
The China Association of Automobile Manufacturers on Wednesday warned it expects significant declines in China’s automotive production and sales levels in February due to the coronavirus outbreak.
LMC said containment measures in various countries, including quarantines, travel restrictions and disruptions to production and transportation could hurt economic growth and cut into confidence.
“Add in a possible consumer recession in, and widely around, affected outbreak locations, and the effects could be quite damaging in markets for expensive durable goods such as cars,” it added.
January auto sales in China fell 19 percent, worse than expected, marking the industry’s 19th consecutive monthly decline, according to CAAM data released Wednesday.
China's National Health Commission reported another 406 new infections on Wednesday, down from 508 a day earlier, bringing the total number of confirmed cases in mainland China to 78,064. Its death toll rose by 52 to 2,715.
Bloomberg contributed to this report.