European sales strong, tough 2010 forecast

Strong sales of new cars in Europe will ensure a solid end to 2009, with some of the major economies recording big monthly and year-to-date increases.
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New car sales rose by 48.4 per cent in France in November and are up 7.6 per cent across the first 11 months of the year.

The November result was similar in Spain (up 37.3 per cent) and Italy (up 31.3 per cent), and the trend is expected to flow through other markets when they release their sales figures in the coming days.

The strong gains come as no surprise when compared to the tumultuous end to 2008 when many companies cut production and demand for new cars dried up.

“The basis of comparison last year was ultra-weak, so we can expect that November and December too should be ultra-strong months across Europe," said Societe Generale analayst, Eric-Alain Michelis.

But French carmakers’ association CCFA President, Xavier Fels, said in the past four month especially he had noticed a confirmed recovery and believed that “compared with 2007, the results were not as bad as all that”.

The major driver behind positive sales this year has been the implementation of scrappage schemes – where governments give consumers cash incentives to trade in their old cars for new ones.

Many will soon come to a close, like Germany’s $8.13 billion funding scheme which officially ended on September 2.


Sales in November were still up 20 per cent as the funding continues to apply to cars that were ordered during the scheme.

German sales are up 25 per cent year-to-date with a forecast of 3.8 million by the end of December, representing an increase of around 700,000 vehicles compared to 2008.

But many are predicting that 2010 could be an even tougher year than 2008, with the German VDA auto industry association anticipating new car registrations could dip well below three million.

“The domestic car market is going to be tough in 2010. Trees do not grow to the sky,” said VDA President, Matthias Wissmann.

He said many manufacturers were relying on continued growth from emerging export markets, especially China.

(with Automotive News)