Toronto, Ontario — June 17, 2019 — In this week’s Tuesday Ticker: if you think Canada’s auto sector is looking frail, just take a look at the situation in the U.K., China and India.
In May, Ford announced it would be closing a plant in Bridgend, Wales. Just the latest in a series of auto plant closures, many analysts are pointing to the planned withdrawl from the European Union as a precipitating of these OEM departures.
Absolute sales of new vehicles in Britain are also dismally low. In April, fewer than 71,000 new cars were purchased, down from close to 130,000 vehicles in April 2018.
In June, Bank of England Governor Mark Carney announced that lower-than-normal investments could be anticipated throughout the economy, but that the damage would be mitigated by an orderly Brexit.
As the search for a new Prime Minister–which will be decided by the Conservative Party’s members and Members of Parliament heats up, it is clear that there is little consensus on how to approach Brexit negotiations within the governing party’s ranks.
China’s Car Sector Crash
Car sales have dropped precipitously in China, with just 1.91 vehicles sold in the world’s most populous country last month, compared to 2.7 million in May 2018. The month marks the eleventh straight drop in vehicle sales, and the largest.
Not all sales sectors have fallen within the Chinese market. Alternate fuel vehicles saw a two percent growth in sales last month, though, in April, alternate fuel vehicles saw a full 20 percent sales increase over April 2018.
The news comes as the Chinese government begins to enforce new emissions standards.
India’s Inventory Issue
A twenty percent year-over-year drop in auto sales has left India’s dealers drowning in unsold vehicles.
With more than half-a-million new cars left unsold in India, the majority of auto manufacturers have scaled back their production. Seven of the nation’s ten largest auto plants have temporarily laid off their workforces in order to cut back production expenses.
A government report revealed that all types of vehicles were overproduced in April and May. The situation is even direr for the nation’s motorcycle manufacturers, with more than three million unsold motorcycles filling up dealership inventories across the South Asian nation.