It has taken longer for the Swiss car
market to begin to show signs of a downturn, but February gave quite a hint that the rush
of the past half year or so is now coming to an end. Car sales after two months trading
were still 2.0% ahead of last year at 43,619 from 42,746, but in February itself the
market dipped by 8.7% to 20,061 from 21,974, with losses felt pretty much across the

The market finished 1998 at 295,165, which
is well above the average result for the country, although well short of the 320,051of
1989. It had generally been felt that 1998 would have seen the sector growing more slowly
than it did, probably to no more than 275,000, with the current year continuing onwards
towards 294,000. Having finished close to that point a year early, it is now expected that
sales for 1999 will drift back towards the 294,000 mark, although they may even slip below
that figure if February is a guide to the near future.


The VW Group has tightened its stranglehold
on the sector year to date, lifting sales by 10.4% to 8,387 from 7,596 and taking market
share to 19.2% from 17.8% last year. However, the share gain of 1.4 market points is
slightly misleading in that VW were short of critical new models at the start of last
year. The February 1999 result might be more illuminating because sales fell by a worse
than average 13.3% to 3,622 from 4,177, but that was due to Audi and Seat slipping
sharply. Audi is currently warning everyone that 1999 is likely to be tough for them, but
Seat should soon start to show much more positive results. Škoda continues to gain,
albeit slowly and from a low base.

The other big winner in the market is
Mercedes-Benz, and they went one better than VW in that they maintained their progress
throughout February in contrast to all of the major contenders in the sector. The A Class
has a lot to do with the Mercedes surge and is currently their top selling model in
Switzerland, but that is only half the story because it only accounts for half the gain.
Mercedes-Benz is currently reeling back the ground that it lost to Audi in particular and
has achieved a most impressive 68.2% sales gain to 3,111 from 1,850 last year.

The biggest loser in the market is Toyota,
which does not help at all in their ambition to be the top Japanese marque in Europe,
especially when rivals Nissan have increased their sales at the same time. The other big
loser to date is GM Opel, down 11.3% to 4,461 from 5,031, but the situation is even worse
if GM USA figures are folded in to the equation because they fell by 55.8% to 218 from
493. It was left to Saab to soften the blow with a 16.4% gain to 333 from 286.

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Light truck sales best for 9 years,
but look shaky

It seems almost churlish to question growth
of 14.2% for Swiss light truck sales over the first two months of 1999, but we do not
believe that the current momentum will be maintained. Sales after 2 months were 3,176 from
2,780, but in February itself the growth rate was just 1.9% at 1,513 from 1,485 and it is
likely that we will now see the sector beginning to slip into reverse.

All of the growth in the sector year to
date has come from Fiat, sales rising by 391 units in a sector ahead by 396 units overall.
That has pushed the Fiat Group back to the top of the table from having been fourth at the
same point last year. Actually, that is another misleading result because the Fiat Group
have actually led the market at the year end since 1997 after having trailed behind the VW
Group throughout most of the current decade.

For the rest of the year we expect to see
the market begin to slip backwards and it would not be a surprise to find that the full
year 1999 result is somewhat down on the 17,915 of 1998, which was the best that the
sector has enjoyed for eight years.

Truck sales dropped sharply in

The truck sector suffered a jolt in
February when sales dropped by 28.0% to 229 from 318. That took sales for the opening two
months to 7.0% down at 506 from 544. The sector has achieved sustainable growth patterns
in the past, but having hit 3,709 units in 1998 we now expect the sector to fall back
quite sharply. We have seen forecasts suggesting that the 4,000 mark will be breached
during 1999 but we would expect a full year of around 3,300 units, and certainly no more
than 3,500.

MAN and Steyr have felt the worst of the
downturn, with MAN falling from second place after 2 months of 1998 to just 6th so far in
1999. We cannot find another occasion when MAN fared so poorly in Switzerland. Their
previous worst was 4th place back in 1992.

Over the past decade, Mercedes-Benz have
sold twice as many trucks in Switzerland as their nearest rival, Volvo. That is something
that they seem able to repeat in 1999, although Volvo won’t be so easy to roll over as
they might have been at times in the past. With Volvo now making the development of their
truck business the top priority, they will surely fight for every sale in every European
country in the period directly ahead.

Bus sector about to turn

Sales of buses were still 42.4% ahead of
last year as at the end of February, at 349 from 245, but again that is a situation that
will likely change very quickly. In February itself the growth rate was only 2.3% at 132
from 129, but by the end of the year we expect the sector to be more or less flat against
the 1998 result.