EMERGENCY HANDBRAKE FOR THE AUTOMOTIVE INDUSTRY
LEADERSHIP
“ PARTNERING WITH A TRADE CREDIT INSURER CAN PROVIDE FIRMS WITH INSIGHT AND KNOWLEDGE ON BOTH MARKETS AND TRADING PARTNERS THAT OTHERWISE MIGHT HAVE BEEN OUT OF REACH ”
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Shannon Murphy , Assistant Head of Risk Underwriting , Euler Hermes
Some areas of opportunity still exist , however . Resilient domestic demand and rising wages will provide a boon to manufacturers in Eastern European countries such as Hungary and Poland , while emerging markets in the Middle East will likely witness healthy growth levels as oil prices stabilise .
EMERGENCY HANDBRAKE FOR THE AUTOMOTIVE INDUSTRY
These global economic and trade slowdowns will affect most sectors , but none more-so than the automotive industry , which will bear the brunt of many of manufacturing ’ s ills . Car sales are in decline globally and have been steadily falling since 2017 . There ’ s a host of reasons for this .
In China , a combination of an oversaturated market , declining consumer demand , trade disputes with the US and an economic downturn have been to blame . But , in Western economies the emergence of technologies that have made ride-hailing , car shares and rentals easier are all contributing to the long-term decline of mass car ownership .
2019 proved a worrying year for production for UK carmakers too , with just one rise in the monthly output recorded . Even that brief blip provided little comfort to manufacturers , however , with its root cause attributed to Brexit-driven stockpiling . It ’ s not the only vulnerable sector though and we ’ ve seen two large UK-based steel stockholders fail this year and also the insolvency of British Steel . There are several reasons why British Steel failed , but a primary one cited was that the customer base had lost confidence in the longterm ability to be a supplier due to the uncertainty surrounding the country ’ s future trading relationship with its key export partners .
JANUARY 2020