The majority of European car manufacturers are forming a consensus on the direction of new car sales over the coming months, with most expecting a decline in sales next year. The industry will be depending on the success of innovative new models to provide a boost across the market.
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The expectation is that the European car manufacturing market will contract by 2-4% overall, with the UK offering perhaps the greatest resistance to the decline, and France amongst the hardest hit.
Despite this trend, the outlook for each of the manufacturers varies considerably. Mazda expects to exceed its targets for the year, with sales so far running ahead of the 220,000 unit goal, buoyed by the 6, 2, and special edition versions of the MX-5. Toyota is also performing strongly, and expects to increase its market share on the back of its deliberate efforts to complement the Toyota’s pleasing ownership experience with European styling.
On the financial side, Volkswagen expects an improved operating profit next year, as its new Golf makes an impact on the market and the high development costs of the Phaeton and Touraeg are put behind them. Ford is clinging to its set 2003 earnings targets and will be hoping for a strong performance in the final quarter.
On the downside, Mercedes-Benz experienced falling sales; down 2% for the first eight months of 2003 compared to last year, with the expectation of flat sales in 2004. Profits at BMW and Porsche, traditionally two of the most bankable manufacturers, are set to stall or decline.
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By GlobalDataAs the Frankfurt motor show begins, the industry will be hoping new models will increase demand and spur the recovery. If the overall market fails to pick up, however, not every manufacturer can improve its fortunes. Renault demonstrates this conundrum better than most: its new Megane has been Europe’s biggest seller of the year so far, and siblings such as the Scenic and Coupe/Convertible could bolster sales further, but its domestic market, on which it is heavily reliant, is in decline. As a result, Renault is likely to maintain its market share, but no more.
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