By Orlov Sergei @ Shutterstock.com
New regulations, tariffs and an emerging market economic slowdown are having a major impact on global auto sales. William Boston, writes at The Wall Street Journal that automakers are entering their first sustained slowdown since the financial crisis. The question is, will it remain just a slowdown, or will auto sales collapse even further? Boston continues:
China’s once-booming car market is cooling, in part because of escalating trade tensions with the U.S. American demand for cars and trucks—long a bright spot for the global auto industry—has topped out, following a seven-year growth streak that helped lift earnings for many car makers and auto-parts suppliers world-wide.
In Europe, where new-vehicle sales have benefited from the continent’s recovery, the car market is also softening as demand returns to prerecession levels. That is making profits harder to come by in a region where many car companies have long struggled to make money.
To be sure, global demand remains robust, driven by continued economic strength, but headwinds are gathering.
Read more here.
Jeremy Jones, CFA
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