The World Health Organization declared the novel coronavirus to be a global healthy emergency last month, and now, as the virus continues to spread, slowing production and lost profits have begun to manifest as well, including in the auto industry. Now, Moody’s has announced that it is lowering its global automotive sales forecast for 2020.
Moody’s current prediction rests at a 2.5-percent decline in auto sales this year. That’s a 1.6-percent drop compared to the firm’s previous 0.9-percent global auto sales decline prediction. Moody’s said the forecast adjustment was due to reduced demand, as well as a disruption in parts sales and raw materials as a result of the new coronavirus epidemic.
Moody’s also indicated that further downgrades were possible if the new coronavirus continues to spread and results in further deaths.
Automotive supply lines from China have been severely impacted by the virus.
New European restrictions on CO2 also play a part in Moody’ downgraded auto forecast. Although automakers are heavily invested in new electric vehicle technologies, EVs remain a small slice of auto sales, and many consumers are still unwilling to take the plunge into the electric segment.
Regarding the novel coronavirus, the epidemic has also affected other areas of the auto industry. For example, organizers recently announced that the annual Geneva International Auto Show has been canceled over fears of outbreaks across Europe, while the upcoming Formula 1 race schedule has been thrown into disarray.
The novel coronavirus is estimated to have infected more than 82,000 individuals worldwide, and has lead to the death of more than 2,800. The virus has been identified in at least 56 countries as of this writing. Also known as Covid-19, the novel coronavirus is believed to have originated from the city of Wuhan in China.
This post was created in collaboration with our sister publication, Ford Authority.