In the first 8 months of 2011, EU passenger car sales declined by 1.3% YoY. Sales in August 2011 rose almost 8%; the rebound was widespread with all large markets registering growth. The weakest markets however remained Spain, Greece and Portugal due to the extremely low levels of consumer confidence in these debt ridden countries.
Commercial vehicles sales continued to grow over summer; in August 2011 sales grew by almost 16% YoY. Year to date sales rose more than 12% YoY. Particularly demand for medium and heavy trucks remained buoyant, with sales in the 1st eight months of 2011 growing by just below 40%.
Export demand remained robust in recent months. German passenger car exports grew 17% YoY in August and 9% in September; 77% of total car output was for export in the January to September 2011 period.
Automotive output grew by slightly more than 10% YoY in Q2 2011; continued strong growth since Q1 2010 has resulted in output nearing the pre crisis production level by mid 2011.
Looking forward this is one explanation of output growth cooling down over the coming quarters. The other one is the rather weak outlook for private consumption, due to consumer confidence falling rather sharply in recent months. At the same time prospects for investment have become clouded by uncertainties with respect to the general business climate in the coming quarters. Also export demand is seen slowing on a par with the expected moderation in global economic growth.
Output growth in 2011 is forecast to amount to just over 10%; while growth is positive in all EU countries with an automotive manufacturing base, Germany and all Central European countries will register double digit growth this year.
Market fundamentals are expected to weaken further in 2012, while still remaining slightly positive and supportive to further but significantly slower output growth. On balance, automotive output in the EU is seen easing off to around 3%; activity in Central Europe will continue to increase at a faster pace than in Western Europe.
