Washington, Oct 15 (AFP/APP):There is trouble on the horizon for the global auto industry, which faces new European anti-pollution standards, shrinking Chinese tax breaks and rising trade barriers, according to the International Monetary Fund.
In a report published Tuesday on the global economy, the IMF casts a glance at this manufacturing sector, which is confronting a fundamental transition: “decarbonization.”
The industry contracted last year for the first time since the global financial crisis began, contributing to the current global economic slowdown.
“Near-term prospects for the industry remain sluggish, and efforts to decarbonize pose a fundamental challenge in the medium term,” the report said.
Auto manufacturing — which accounts for 5.7 percent of global GDP and eight percent of goods trade — shrank by 1.7 percent last year by volume of vehicles produced, according to the IMF.
In China, the world’s largest auto market, auto sales fell by three percent, their first decline in 20 years. Similar declines were recorded in Germany, Italy and Britain. In the United States, sales have continued
to rise, but only slightly.
The worsening performance has sent share prices for the 14 largest manufacturers down by 28 percent on average, the report said.
The auto industry’s retreat shaved 0.4 percent off of global GDP last year, while auto exports, even by the world’s largest manufacturers, fell 3.1 percent.