It's no big secret that the automotive industry has its ups and downs when it comes to consumer demand. Some years dealerships like your own simply can't keep up with the influx of new shoppers, while other years feel like more of a struggle. However, a recent report from Patrick McGee of The Financial Times points to a trend that moves beyond the cyclical nature of consumer demand and points to a much more fundamental shift in the automotive world.
So just what did McGee uncover? How about the fact that it looks like 2018 may have been the all-time peak for sales of vehicles with internal combustion engines.
As McGee goes on to explain in this industry breakdown, demand stalled and dipped for cars built around combustion engines in the largest three markets in the world (The U.S., China, and the EU) in 2018. At the same time, sales of electric vehicles rose – potentially allowing for a unique scenario in which total cars sales rise in 2019 and 2020, even as traditional combustion engine sales plummet.
Outside of the advent of electric alternatives, plenty of other factors played a role in the drastic shift in projections regarding internal combustion engine sales released by Jato Dynamics and other firms that specialize in analyzing automotive marketplace data. Specifically, McGee points to financing issues among Chinese consumers, the ongoing embargo on Iran, U.S.-led trade wars, the quagmire that is the current state of Brexit, and progressive new emissions targets from European governments. (See the ban on combustion engines set to take effect in Paris in 2030 for a great example of this concept in action.)
Has your dealership noticed a drop in sales of "conventional" or traditional combustion engine cars over the back half of 2018? What plan does your affiliated automaker have in place to fulfill the rising demand for electric vehicles? Let us know in the comments down below, and be sure to set aside a few minutes today to read over this striking industry report from Patrick McGee and the rest of the team from The Financial times.