As protests over soaring fuel costs spread across Europe, GM’s European chief has warned that business in the mature North American and certain European markets ‘could be dragged down to lows we haven’t seen since the recessionary days of the early 80s’.
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Writing in his corporate blog, Carl-Peter Forster said that ‘while energy costs are draining the consumer side of our financial equation, the impact of skyrocketing commodity prices and the huge disparity between the Euro and most other currencies are seriously dragging down the production side of things here in Europe.’
The European carmakers’ trade body ACEA has also just released figures showing that the European car market fell 7.8% year-on-year in May due to one less working day and a ‘massive’ increase in fuel prices. Cumulative sales were off 1.5% in the first five months.
The ACEA figures confirmed estimates issued by JD Power Automotive Forecasting earlier this month, which prompted the forecaster to revise its forecast for car sales in Western Europe this year down to 14.5m units.
Cheer for autos was also in short supply in the City.
Investment bank Goldman Sachs on Friday reduced its overall view on the automobile sector to ‘neutral’ from ‘attractive’.
“We believe that the auto sector will trade within a `fat and flat’ range,” the banks’ analysts said in a note to clients.
“We adjust estimates to reflect a more protracted slowdown in global car sales. We also incorporate significant increases in raw material costs and current foreign exchange rates in our 2009 estimates,” they said.
Meanwhile in the US, GM said that June sales are shaping up along the lines of recent months – when they declined strongly, led by tanking truck sales.
“We’ll make the sales report at the end of the month, but it looks a lot like it did in the previous couple of months,” GM North America President Troy Clarke told reporters at an electric car conference in Washington.
