The Western European car market grew by 1% in August over last year, according to figures released today by JD Power Automotive Forecasting. However, year to date the market was down by 0.1%.
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The August market is estimated at 849,641 units with sales in the first eight months put at 10,038,346 units.
The key German car market showed signs of underlying improvement last month but remains below year ago levels – it was down 2.2% in August and is 7.6% below last year’s pace on a cumulative basis.
In Germany, sales to private individuals continue to suffer from the 3% VAT increase in January and uncertainty over future levels of CO2-based tax – a new scheme is scheduled to be put in place for the beginning of 2007, though details have yet to be announced and buyers are holding off while this uncertainty remains.
JD Power says it expects to see continued weakness in retail sales this year and, though business sales are surging as OEMs compensate for the lack of retail demand, this will not be enough to prevent a fall of as much as 9% in the overall car German market in 2007. A fairly solid rebound is expected for 2008.
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By GlobalDataThe French market cooled a little in August, as expected, after a very strong July out-turn. The market remains on course for a modest increase in 2007.
The Italian market remains strong, though the initial boost to sales from the government scrapping incentive initiated in December 2006 appears to be wearing off a little. With a strong year-end expected, the full-year result in Italy should still top 2.5m units. However, 2008 will start very weakly after the scrapping incentive is terminated.
The Spanish market enjoyed a relatively solid month in August, recovering a little from cooling in the previous two months – the selling rate rose to almost 1.6m units/year. As with Italy, the ending of a government scrapping incentive will lead to a surge in demand at year-end, and a weak start to 2008.
The UK market was close to expectations in what is a seasonally weak month, JD Power said.
The forecaster said that the outlook for the European market in 2008 remains clouded by continued turbulence and the as yet unquantifiable impact of recent financial market turmoil.
The 2007 Western European car market is forecast at 14.76m units – unchanged on 2006. However, the market is forecast to decline by 0.9% to 14.63m units in 2008.
