Global light vehicle sales have been growing continously since 2009. The outlook for 2019 and 2020 is currently in the process of being downgraded however as the second part of 2018 was characterised by a weakening market. Overall, the automotive sector consumes some 10-15% of the global steel produced - therefore a significant slowdown in the growth of the sector will have a direct impact on the steel market.

According to Moody’s, global light vehicle sales are unlikely to recover meaningfully in 2019 and 2020 after declining during the latter part of 2018. The credit rating agency has changed its outlook on the global auto manufacturing industry to negative from stable.

Global light vehicle sales totalled 94.9 million units in 2018, short of Moody’s previous forecast of 95.5m. The agency now expects unit sales growth of just 0.5% in 2019, down from the previous 1.2% forecast. For 2020, growth is expected to remain modest at around 0.8%.

G-20 GDP should grow 2.9% on-year in 2019 and 2.8% in 2020, propping up global light vehicle demand. “However, some regions, especially in developed markets, may have already surpassed the top of the industry cycle,” Moody’s says in a report. “We expect somewhat stronger growth in developing markets, like China, and in light commercial vehicles, which benefit from macroeconomic growth.”

The negative outlook also reflects heightened political risks, such as possible higher US tariffs and a potential no-deal Brexit scenario.

US light vehicle sales are seen declining -2.9% in 2019 and -0.6% in 2020, as the accommodative financing environment that had long supported US auto sales continues to recede. Moody’s forecast for 2019 unit sales remains unchanged at 16.8 million.

Western European car sales will see anaemic growth of only 0.4% in 2019 and 0.6% in 2020. Sales in the early part of 2019 will be weighed down by Brexit-related uncertainties and continued road certification delays following last September's implementation of WLTP emissions standards.

Chinese auto sales should grow 2% in 2019 and 1.8% in 2020. This will be driven by Chinese GDP growth of 6% in 2019 and 2020, as well as policy guidance announced by the central government in January to boost auto purchases.