Ratings agency Moody's is lowering its forecast for global auto sales because of the new coronavirus outbreak.

It now reckons that sales will decline 2.5% decline in 2020 instead of only 0.9%. This year's anticipated decline follows a fall in 2019 of 4.6%.

Moody's said in a report Wednesday that the outbreak would reduce demand and disrupt supplies of parts and raw materials for the auto industry.

It said sales in China, the world's biggest car market, would fall as people avoid crowded areas, including auto dealerships. It added that “if the rate of infection does not abate and the death toll continues to rise, there is the potential for more severe disruptions in manufacturing supply chains, including in the automotive sector."

Moody's said new limits on carbon dioxide emissions in Europe would also weigh on the auto industry there. Automakers must invest heavily in new electric autos that have zero local emissions even as profits from sales of conventional cars weakens in key markets.