Passenger car sales rose by 20.1% in June
to a new all-time best for the month of 31,035 from 25,844. That took growth for the year
to 9.9% at 179,842 from 163,713. The annualised selling rate now stands at 312,000, and
that is the highest level in Austria since 1992. The all-time record for full-year sales
in Austria is the 320,094 of 1992, and the way that the market is shaping up at present,
that record is in danger of falling.

Average car sales in Austria over the past
ten years have been 290,000, and the sector is not prone to wild fluctuations. In that
period of ten years they have not sunk below 273,000 and only once ever have they exceeded
310,000. The parc is a little bit old at 13 years, but there is not much room for growth
with regard to the car ownership ratio against the head of population (which is 2.1
persons per car). There is likely to be some growth this year from the natural replacement
cycle, but on that same basis there should be a contraction in demand during next year,
possibly to 300,000 from the 320,000 or so that will be achieved this year.

Confidence in the continued well being in
the sector can be taken from the number of manufacturers who have managed to remain in the
black with regard to percentage growth for the year to date. In effect there are only
three casualties, and two of them are not a surprise. Worst affected in the market place
to date has been Fiat with sales down by 17.6% at 4,930 from 5,981. A drop of over 1,000
units in a market ahead by over 16,000 units takes some explaining, and Fiat doesn’t
have too many excuses. There is the question of the new Punto, which would undoubtedly
have had some effect. The Austrian car buyer is well versed on what is happening in the
market place, and news of the imminent arrival of the new Punto would undoubtedly have
stifled demand for that particular model. But Fiat is not a one-model company and it is
looking increasingly likely that Fiat is going to experience a tough time in Europe in the
period immediately ahead. With half of Europe on holiday in August, Acea does not issue
July European sales results until September, when it also issues the August figures. At
that point in time we will analyse the Fiat performance on a country by country basis to
see whether current problems exist in pockets, or whether they are widespread.

Nissan are also on the wrong side of the
zero line year to date, sales falling 15.1% to 3,735 from 4,397, but Nissan is showing
some signs of reversing the downward trend. Honda is the surprise with sales down 28.0% at
2,626 from 3,646 and with no signs of a let up. Honda has traditionally been very steady
in Austria, selling an average 6,300 cars a year with little fluctuation. Yet for 1999 the
company seems to be on track for no more than 4,250. Honda only released the new Accord
last year, so this should be the year when it is at its peak, although it is possible that
the lack of a 5-door hatchback has held sales back. That model should soon be available in
numbers, and Honda will be hoping that it does the trick because it will be another year
before the new Civic is launched.