Global vehicle markets could yet be subject to two massive unknowns even as worldwide financial recovery starts to slowly turn around moribund economies.

Despite bright spots around the world such as certain Asian markets and gradual improvement in the US, there still remain colossal challenges as LMC managing director, Pete Kelly, outlined at today's just-auto Industry Intelligence Seminar near Birmingham, UK.

"We see the real weakness in Europe starting to emerge," said Kelly. "The possible break-up of the Eurozone would be extremely damaging, including the fiscal cliff around 2013, where US policy makers would fail to agree a debt ceiling."

Problems surrounding the Eurozone have come back to the fore with a vengeance after a relatively quiet northern hemisphere summer, with German Chancellor, Angela Merkel, receiving a violently hostile reception on her visit to debt-ravaged Greece this week.

Meanwhile, the colossal US debt has also taken centre stage ahead of next month's American Presidential elections as both main candidates offer different solutions to the same problem that refuses to go away.

"The UK is contracting even now and will take many years just to recover to where it was prior to 2008," said Kelly. "On a very widespread adoption of fiscal austerity policies, European recovery will not happen any time soon.

"European consumer confidence is now starting to turn down. Spain's performance as a car market has been catastrophic - 750,000 units [are] half of what the market was prior to the crisis - we are not expecting Spain to recover before the end of this decade.

"Italy is not quite as bleak, but recovery will be slow and difficult."

Despite the almost unremitting gloom enveloping Europe, Kelly nonetheless pointed to two relatively bright spots, namely Germany and the UK, which have enjoyed markedly contrasting automotive performance compared to their European counterparts.

"What we have seen in this particular recession is unemployment has not taken off dramatically [in the UK], increasing only by a couple of percentage points since 2008," said Kelly.

"In western Europe, we have entered a new and deeper trough and recovery will not be until 2015 - volume brands are under siege."