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According to a study, global car sales could fall by 3.1 million units in 2019. The global car sales figure is expected to be 77.5 million, a decline of around 4%.
The decline is larger than the car sales slump seen in 2008, when sales fell by 3 million units. But, at 5%, the percentage decline in sales was higher in 2008. Global car sales fell to 80.6 million in 2018 from 81.8 million in 2017. This is said to be the first decline since 2009.
China is one of the main reasons for the decline in sales in 2019. Year-to-date sales are said to be down by 11% compared to the first 10 months of 2018. Sales are expected to fall by 2.1 million units to 21.6 million. Sales in US and Western Europe are also expected to decline by 2% to 16.9 million and 14 million respectively. Year-to-date sales in Brazil, Russia and India are said to be down by 5.5%, with sharp falls in India.
In 2020, sales in China may recover by 1%, but a global rebound is unlikely.
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This shows that a lot of the macro-level problems aren't specific to India. Worldwide:
- Cars have gotten too expensive.
- People are holding onto existing cars longer.
- Uber is replacing car ownership.
- 2-wheeler fans are sticking with them for commuting.
- Many are put off by parking & traffic woes.
- Used cars continue to attract more & more buyers.
- Etc.
Quote:
Originally Posted by GTO
(Post 4704769)
This shows that a lot of the macro-level problems aren't specific to India. Worldwide:
- Cars have gotten too expensive.
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To add, apart from cars themselves, car 'ownership' has gotten a lot expensive as well, both by Govt. in form of taxes/insurance cost/ fuel etc and from the manufacturer as well in form of cost/ maintenance and overall upkeep.
So I am not amazed if cars sales fall by a large margin.
Quote:
Originally Posted by GTO
(Post 4704769)
This shows that a lot of the macro-level problems aren't specific to India. Worldwide:
- Etc.
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Great list , adding to the Etc,
- Newer cars are more reliable and long lasting
- Changing lifestyles of the Millennials
Quote:
Originally Posted by mazda4life
(Post 4704793)
Great list , adding to the Etc,
- Newer cars are more reliable and long lasting
- Changing lifestyles of the Millennials
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Two more
- Metro availability in most cities.
- Climate change debate
Quote:
Originally Posted by GTO
(Post 4704769)
This shows that a lot of the macro-level problems aren't specific to India. Worldwide:
- Used cars continue to attract more & more buyers.
- Etc.
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All points are bang on.
To add, the product life-cycle has become such a way that people tend to post-pone the purchase.
To elaborate, with facelifts and generations changing every 2 and 4 year respectively, the customers are post-poning their car purchase to wait for the next generation. And when that comes, they realize that their car is good enough and the extra price hike is not worth it.
Same happens to me with phones, still on my Oneplus 3 with absolutely no regrets.
Cars are going out of reach for the masses and definitely people are hanging on to their cars longer and buying less new cars. This is definitely one of the causes for the drop in sales
While we are on the topic, saw this video few days ago. The problem is global. Even in US of A, where cars are an essential part of life, the story is same.
https://youtu.be/nRAJwaLV-iU
This is good news. I hope they somehow reduce existing cars by giving subsidies to electric vehicles.
I hope everyone switches to electric.
I need all the worlds fuel for my car. Thank you.
Quote:
Originally Posted by i_see
(Post 4704925)
The problem is global. Even in US of A, where cars are an essential part of life, the story is same.
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Wow - that video is an eye-opener. I had a different perception about cars and affordability in the USA. Thanks for sharing! :thumbs up
Cars, indeed have become more expensive over the world making new cars practically out of reach for the common man. Consumer appetite for compacts and sedans too have waned in favour of the bulky SUV's. Households too, are not wanting to keep multiple cars due to parking woes and terrible traffic in bigger cities.
Emission norms too, are getting more stringent, as per an article by the BBC, carmakers on an average have to add €1,000 worth of addendums to make them comply. Companies too have been slow to roll out electric vehicles that are affordable and offer a realistic range and countries have been slow to adapt to the changing infrastructure requirements for the same.
The newer generation is already moving away from the concept of owning new cars paving the way for a gig economy to flourish. Rising debt among freshly graduated students means they end up clearing their student loans for the first couple of years (An MBA from a decent Indian college costs around 20-25 Lakhs)
People also seem to have rising concerns with respect to the volatile markets holding off any big ticket purchases. A car, methinks is the single biggest depreciating item any common family buys.
It seems that car sales have peaked and they will continue to stabilise for the coming few years as we foresee major rejigs with respect to the type of vehicles, what powers them and how we end up using/owning them.
May i add couple more reason from my side..
1. People are becoming more health conscious and hence avoid cars whenever possible.
2. Also cars used to be status symbol until now which place has now been taken by other things like travel to exotic locations, adventure sports, life experiences.
No 'wow' factor in any new car launches (barring very few) with customers seeing through old wine in new bottle tactics.
The impending EV onslaught and ambiguity over diesel cars have also prompted the customer to wait for a radically different option
Quote:
- People are holding onto existing cars longer.
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I do not have any data to challenge this hypothesis but everywhere around I see people are jumping onto newer/pre owned cars much earlier than before. Just the look and features of newer cars are enough for people to sell their old cars in perfect driving condition. Maybe 5 years is the average holding time I see nowadays as compared to 8 or 10 earlier. And am talking about 10 years before or so.
In India, the car ownership is declining and it can be attribute to following factors:
1. Car driving has now become chore; earlier it was pride.
2. The uncertainty factor - jobs do not ground us anymore. People are changing jobs frequently and it may require change is State/Country. Unfortunately car can't change states/countries so easily as vehicles registered in other states are "targeted".
3. Work pressure - more things can be accomplished by holding smartphone than steering wheel in 2 hr to-fro neck to neck commute.
4. The uncertainty with availability of a car (if u dont own one) has decreased tremendously. UBER for in city commutes and Zoomcar for long distance commutes fills the gap very nicely.
5. Can models upgrading themselves with newer features are not helping the cause either. Lease-it change-it model is more suited in such environment.
Quote:
Originally Posted by GTO
(Post 4704769)
This shows that a lot of the macro-level problems aren't specific to India. Worldwide:
- Cars have gotten too expensive.
- People are holding onto existing cars longer.
- Uber is replacing car ownership.
- 2-wheeler fans are sticking with them for commuting.
- Many are put off by parking & traffic woes.
- Used cars continue to attract more & more buyers.
- Etc.
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Add another big one - a static / declining population.
Add a falling consumer base to the reasons above and developed world will do well enough to buy just enough cars each year to keep sales flat.
At some point, China's one child policy will have a similar impact on Chinese demand.
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