The slowdown in auto output that depressed headline industrial production late in 2018 is fading as inventories are starting to fall at manufacturers and dealerships. As a result, the auto sector will likely contribute positively to headline output growth in the next two quarters. Auto sales growth remains soft, however, linked to reduced sales of completed properties and broader maturation of the auto market. A modest improvement in car sales in the second half of 2019 likely hinges on policy support for rural and secondary market purchases, along with the broader cyclical recovery.
