Moody’s Investors Service has said car sales are expected to be relatively flat this year in India after plunging 11.8 per cent in 2019 amid slowing economic growth. The rating agency mentioned that it expects Indian auto sales to rise 0.5 per cent in 2020, supported by stimulus measures, discounts on new cars that do not comply with Bharat Stage VI (BS VI) emission norms, which will take effect in April. It however said weak consumer demand and tight liquidity will likely limit any improvement in car sales this year. For 2021, it expects Indian car sales to rise 2 per cent.
Further, the agency lowered its global sales forecast as the coronavirus outbreak reduces demand and disrupts automotive supply chains. The agency said that it expects global auto unit sales to decline 2.5 per cent in 2020, narrowing from a 4.6 per cent drop in 2019, but worsening from the 0.9 per cent decline that it had previously projected for this year. It expects sales to rebound only modestly in 2021 with growth of 1.5 per cent. Its outlook on the sector remains negative.
Moreover, the agency noted that it would consider returning to a stable outlook if it was to expect global light vehicle sales growth to recover to at least 1 per cent over the next 12 to 18 months. A stable outlook would also require improving pricing and at least stable capacity utilization. Besides, it also predicted auto sales decline in China. In the wake of the coronavirus outbreak, it expects auto sales in China, which includes both passenger vehicles and commercial vehicles, to fall 2.9 per cent this year, a meaningfully weaker performance than the 1 per cent growth it had previously projected.
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