CSM Worldwide, the global leader in automotive forecasting and advisory services, expects passenger car and light commercial vehicle sales and production in western Europe to continue to decline well into 2010 as credit remains tight and consumers avoid replacing their vehicles until absolutely necessary. Sales will fall more than 7.7 percent in 2008 and another 12.6 in 2009, while production in the region will fall at similar rates for each year.
Passenger Car Sales
CSM projects that 2008 passenger car sales in western Europe will fall by 1.1 million vehicles, or 7.4 percent, to 13.6 million, compared to 14.7 million in 2007. The sales decline will accelerate in 2009 by 12.4 percent to 12.0 million units.
"European consumers are dealing with a double whammy of tight credit and high inflation," said Walt Madeira, CSM manager of European vehicle sales forecasts. "Banks have stopped lending to lower-income consumers, and even those who qualify for loans find that interest rates are too high. As a result, drivers are putting off buying vehicles. Consumers will need to be lured by attractive financial terms, but those will be difficult to implement due to the ongoing financial crisis. Government incentives will be needed to jump-start vehicle demand."
The largest declines will be in Italy, Spain and the United Kingdom:
| Western Europe Passenger Car Sales | ||||||
| 2007 | 2008 | 2009 | 2008 | 2009 | ||
| Total W. Europe | 14750903 | 13663689 | 11970325 | -7.4% | -12.4% | |
| Italy | 2469197 | 2133262 | 1866221 | -13.6% | -12.5% | |
| Spain | 1614737 | 1184676 | 1002417 | -26.6% | -15.4% | |
| UK | 2404007 | 2164796 | 1811266 | -10.0% | -16.3% | |
| France | 2064539 | 2074106 | 1855975 | 0.5% | -10.5% | |
| Germany | 3148163 | 3117192 | 2799535 | -1.0% | -10.2% | |
"We don’t expect credit in Western Europe to loosen up until the second half of 2010 when central bank rates likely will fall below four percent," Madeira added. "Consumers will need to prove they are credit-worthy, and sales will be driven primarily by consumers who can no longer delay replacing their vehicles. Consumer confidence will improve slowly but will remain relatively low."
Commercial Vehicle Sales
Light commercial vehicles will see even more dramatic declines as sales shrink to rates
not seen since 1996-97. CSM forecasts declines of 9.7 percent for 2008 and 14.0 percent in 2009. As with cars, the sharpest drops will occur in Italy, Spain and the U.K.
| Light Commercial Vehicle Sales < 3.5 ton | ||||||
| 2007 | 2008 | 2009 | 2008 | 2009 | ||
| Total W. Europe | 2049723 | 1850322 | 1591760 | -9.7% | -14% | |
| Italy | 251418 | 236936 | 207486 | -5.8% | -12.4% | |
| Spain | 273757 | 172968 | 136183 | -36.8% | -21.3% | |
| UK | 338118 | 296813 | 230247 | -12.2% | -22.4% | |
"Light commercial vehicle sales often are an indicator of overall business sentiment," Madeira noted. "Business demand for vehicle replacement is very closely linked to economic outlook, and the ups and downs usually run parallel to the economy. Commercial vehicle slowdowns normally come before passenger car slowdowns and also recover sooner, so positive growth in commercial vehicle demand likely will signal an uptick in car sales."
| Passenger Cars + Light Commercial Vehicles | ||||||
| 2007 | 2008 | 2009 | 2008 | 2009 | ||
| Total W. Europe | 16800626 | 15514012 | 13562085 | -7.7% | -12.6% | |
| France | 2525106 | 2541265 | 2276330 | 0.6% | -10.4% | |
| Germany | 3369703 | 3344588 | 3005909 | -0.7% | -10.1% | |
| Italy | 2720615 | 2370198 | 2073707 | -12.9% | -12.5% | |
| Spain | 1888494 | 1357644 | 1138600 | -28.1% | -16.1% | |
| UK | 2742125 | 2461609 | 2041512 | -10.2% | -17.1% | |
Production Outlook
CSM expects light vehicle production in western Europe to fall slightly more sharply than sales in 2008, with production down 8.8 percent. 2009 will see a further decline of 12.4 percent as demand drops in export and emerging markets.
| Western Europe Light Vehicle Production | ||||||
| 2007 | 2008 | 2009 | 2008 | 2009 | ||
| Passenger Cars | 14182982 | 12889029 | 11326191 | -9.1% | -12.1% | |
| Light Commercial Vehicles | 1673600 | 1579869 | 1349325 | 5.6% | -14.6% | |
| Total W. Europe | 15856582 | 14468898 | 12675516 | -8.8% | -12.4% | |
"After a drop of more than 18 percent in October, production remains down sharply for the fourth quarter," said Mark Fulthorpe, Director of European Vehicle Forecasts. "The slowdown is accelerating in the markets of Western Europe, and the sharp fall in the U.S., coupled with deterioration of the outlook for emerging markets will be a major constraint on exports. The recovery from the expected low-point of 11.3 million units in 2009 will be slow and drawn out as economic activity will improve at very moderate pace across Western Europe. Output levels will begin to rebound in 2010, but because the short-term decline is deep and protracted, the long-term recovery will be slower to materialize."
