2024 and 2025 it will be years anything but simple for the automotive sector. This is what emerges from the latest Moody’s report which lowered the outlook on the global auto industry from stable to negative. In fact, the rating agency has revised its estimates on sales and margins downwards due to the decline in demand and increased competition, factors that are pushing prices down. Conditions valid in both the mass and premium vehicle segments.
Sales and globals
For 2024 Moody’s predicts a sales growth that will stop at +0.4% (he had estimated +1.6% previously). Sales for 2025 are also lower: from +2.1% the rating agency went to +1.4%. Moody’s also predicted that operating margins will continue to decline – a descent already started in first six months of 2024 – up to 7%. Pessimism about margins also for 2025: according to the rating agency, in fact, the moderate growth in volumes will not be sufficient to offset the pressures on prices and restructuring costs, an issue that will mainly concern activities in Europe and the United States .
China, Europe and the United States
The situation described in the report, however, is very different in the three major economic areas. Rechargeable vehicles – pure electric and plug-in hybrids – will drive a limited growth in the Chinese marketwith sales expected to increase 0.6% in 2024 and 0.4% in 2025. The European market is seen slowing down: 2024 should in fact close with a total increase in sales of 1% after the +1.7% recorded in the first eight months, while 2025 will see a growth in registrations of 1.5%. Estimates for the United States are also down: This year, total car sales are expected to stop at 15.7 million units and no longer at 15.9 million.
The recovery
In a report released last week, Moody’s predicted that some form of recovery will not be seen before of the second half of 2025. The rating agency, however, admitted a limited forecasting ability given the current market weakness and related volatility.
