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12/10/2019
Economic Publications

The global automotive industry and enhanced regulations: a very steep path ahead

The global automotive industry and enhanced regulations: a very steep path ahead

The global auto sector is facing several challenges including enhanced and stricter regulations against environmental risks in the context of a slowdown of the global economy. Car sales are on a downward trend, as uncertainty bites.

Moreover, regulations around the world are becoming more stringent as Europe and, in the United States, the State of California in particular; implement tougher norms, followed by regulation bodies in other big markets for the auto sector. Consequently, auto companies’ profitability will be impacted, as they will invest to deliver cars tailored to meet their consumers’ evolving needs, while complying with stricter rules regarding requirements to produce cars that generate lower gas emissions for example, which will increase their costs.

Finally, the car sector, while trying not to be outrun, will be reshaped by the entry of newcomers such as Google Waymo and Tesla alongside historical traditional actors, as well as a wave of mergers and acquisitions.

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