A new year often brings a sense of optimism. But with the auto industry looking at likely sales declines in the world's biggest markets, 2020 may not be a joyride.
Let's start in North America.
After a historic five-year run of 17 million-plus annual new-vehicle sales in the U.S., deliveries are widely projected to slip into the high-16 million range this year. That's a healthy volume by historical standards, but a shrinking market makes everyone's job harder. And there still are some wild cards out there.
President Donald Trump again threatened to impose tariffs of up to 25 percent on vehicles from the European Union, which could hurt dealers on this side of the Atlantic and spark further retaliation against American products. Mexico is in a sales, production and export slump. And the USMCA trade pact, signed by Trump last week, still needs to navigate a tough partisan path to ratification in Canada, which could delay implementation — and the billions in anticipated investment in North American parts-making.
In Europe, the market narrowly avoided a 2019 sales decline after a surge of buying in December. But amid regulations aimed at lowering carbon emissions and unresolved trade tensions with the U.S. and the U.K., industry association ACEA expects registrations to fall 2 percent this year.
But the storm clouds in North America and Europe pale in comparison with those in China, by far the world's biggest market. That nation's slowest economic growth in 29 years contributed to the second straight year of significant new-vehicle sales declines last year.
The United States' 25 percent tariff on China-made vehicles remains intact even after the nations agreed to a partial resolution to their trade dispute.
The Chinese government's aggressive plan to populate its cities with non-polluting electric vehicles is showing signs of weakness, as EV sales fell for the first time last year.
And now the city of Wuhan, a key cog in the nation's auto industry, is the epicenter of the coronavirus, linked to more than 150 deaths as of last week and triggering steps to slow its spread that will also impinge spending worldwide. How much, no one can realistically yet project.
All of this likely doesn't add up to anything similar to the devastating global financial crisis that rocked the industry a decade ago.
But for a year when there's no recession in sight, it might well feel like one.