West European car sales enjoyed a solid 5.8% gain over July 2006 but this was a reflection of the weakness of July last year more than real strength this year, according to JD Power Forecasting data.
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In fact, when one looks at the seasonally adjusted annualised rate of sales – at just 14.1m units/year – it becomes clearer that July was a rather unimpressive month, the data analyst said.
Much of this weakness stems from Germany, though sales in Spain were also a little under par. With a downward revision to the German market forecast for this year, it should no longer be expected that the West European car market will grow in 2007, while payback in Spain and Italy looks negative for 2008.
Year to date, the market was down by 0.1%.
Overall car sales in Germany in 2007, including surging sales to businesses, are now expected to decline by close to 9%.
The Italian market is still expected to turn in a strong full-year gain in 2007, despite the rather average July out-turn, as a result of the ongoing scrapping incentive there.
When this scheme ends in December 2007, there is likely to be a surge in sales representing a last attempt from buyers to take advantage of the incentive. A similar situation is assumed in Spain when a long-running scrapping incentive is scheduled to terminate.
European sales for 2007 are now expected to come in broadly level with last year.
