in the last 12 months china the largest vehicle market in the world reported 4 per cent contraction in units produced for the first time in nearly two decades new delhi the changing economic policies of the countries and auto players effort to promote cleaner vehicles notably decarbonisation of engines is likely to dent global vehicle demand the international monetary fund imf warned on tuesday adding that the nearterm outlook for the industry remains sluggish the imf said in its latest world economic outlook projections that the outlook of the auto industry remains conservative advt nearterm prospects for the industry remain sluggish and efforts to decarbonize pose a fundamental challenge in the medium term the report added in 2018 the automobile industry contracted for the first time since the global financial crisis contributing to the recent global slowdown that started in 2018 as per the report while the global automobile production declined by 17 per cent the global car sales fell by about 3 per cent last year as per the report it is to note that the size of the sectors gross output that is the sum of its value added and intermediate consumption is about 57 percent of global output according to the worldinputoutput database also vehicles and related parts are the worlds fifth largest export product accounting for about 8 percent of global goods exports in 2018 in the last 12 months china the largest vehicle market in the world reported 4 per cent contraction in units produced for the first time in nearly two decades other large markets like germany italy and the united kingdom also registered a massive decline while production in the united states and large emerging markets expanded marginally the world economic outlook report pointed out the downturn has continued into 2019 as indicated by declining global light vehicle sales through june 2019 majorly due to continued subdued momentum in china and europe consistent with performance stock prices of the largest 14 car manufacturers have declined by 28 percent on average since march 2018 the report revealed advt the contraction in car production directly subtracted 004 percentage point from global output growth last year imf spells out that considering that global growth slowed by 02 percentage point in 2018 from 38 per cent to 36 per cent these estimates suggest that automobile production has been an important factor in the global slowdownbesides automobile exports from the 14 biggest carproducing countries fell by 31 percent in 2018 imf estimates suggest that the contraction in car exports directly subtracted 012 percentage point from global trade volumes in 2018 following a positive contribution of 003 per cent a year ago outlookthe production of light vehicle segment is expected to shrink by 4 per cent in 2019 and register a flat growth of 01 per cent in 2020 imf said citig projections of some analysts in china higher tariffs on light vehicle imports from the united states which is set to take effect in december 2019 increasing