The automotive industry slowed in the second half of 2018 as global sales, earnings and stock prices stalled due primarily to economic uncertainty and declining consumer confidence globally after a strong opening half to the year. The automotive industry continues to evolve as electrification gains a stronger foothold globally and autonomous vehicle development remains a focus. Late in the year, North American automakers implemented drastic restructuring plans to eliminate less profitable sedans from their lineups and focus on larger vehicles.
Global light vehicle sales declined 0.5% in 2018 relative to 2017 driven by the unexpected decline in China. In the U.S., light vehicle sales grew 0.6% in 2018 to 17.3 million units.1 In December 2018, U.S. light vehicle sales reached 17.51 million units at a seasonally adjusted annual rate (SAAR), in line with recent historical periods.2
Interest rates on consumer installment loans for new automobiles reached 5.30% in November 2018 in the U.S., up from 4.81% in November 2017 and the 5.05% mark in August 2018, creating further headwinds for the industry.3
In 2018, auto production and sales in China declined 4.29% and 2.8%, respectively, compared to 2017. Despite this decline, commercial vehicle production and sales increased 1.7% and 5.1%, respectively.4,5
In Europe, decreases in new passenger registrations occurred throughout Q4 2018, which culminated in a 8.4% decline in December 2018 relative to December 2017.6
M&A activity in the automotive sector continued to slow in the second half of the year. Deal count in 2018 consisted of 33 deals transacted, compared to 80 in 2017.7
Public company equity performance in the Automotive Original Equipment Manufacturer (OEM), Dealer, Aftermarket and Supplier sectors all trended significantly downward in 2018, especially throughout the second half of the year.7
Read the report for more detail on sector activity.
1 “Global Light Vehicle Sales Update.” LMC Automotive Public Data.
2 “U.S. Light Vehicle Sales.” WardsAuto Public Data.
3 Federal Reserve Economic Data (FRED).
4 China Association of Automobile Manufacturers.
5 “Passenger Car Registrations: +0.1% in 2018; -8.4% in December.” European Automobile Manufacturers Association. Jan. 16, 2018.
6 S&P Global Market Intelligence.
7 McDonald, Loren. “10% of New Vehicles Purchased in California are EVs.” Clean Technica. Nov. 12, 2018.