JD Power figures show that the West European car market dropped by 8% in May driven by serious weakness in Spain and Italy. That prompted JD Power to downgrade its forecast for annual car sales in Western Europe this year.
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What’s worse, unlike some earlier months in the year, the fall could not be blamed on seasonal factors but, rather, reflects some genuine signs of weakness, JD Power said.
The most profound fall was in Spain but weakness was also evident in Italy, Germany and Ireland.
The market research and forecasting firm said that the European market outlook has worsened slightly for 2008.
The Spanish market collapsed in May with sales down by 24% year-on-year – on a seasonally adjusted annualised basis, it was the lowest result in a decade. The result was bad enough to prompt the Spanish government to announce that a new scrapping incentive will be created, starting by the end of July.
Italian sales also continued to slide in May – off 18% on last year.
The German market underperformed in May, with sales down by 6% on the same month in 2007. However, JD Power noted that the German market remains 4% ahead of last year in year-to-date terms and said that the market will return to growth in the coming months.
The French market was one of the bright spots in Western Europe in May. The selling rate moved up a gear to 2.25m units/year, quite a bit in excess of JD Power’s full-year 2008 expectation of around 2.1m units.
UK sales dropped by 3.5% in May with the selling rate remaining relatively stable compared with last month (just under 2.4m units/year selling rate). Continued falling sales are expected in the UK in both 2008 and 2009 as economic troubles impact consumer spending on cars, JD Power said.
JD Power’s Western European car market forecast is now 14.49m units for 2008 – a 2.1% decline on last year. The forecast for 2009 currently stands at 14.44m units.
