Despite the rhetoric and political posturing surrounding the Iraq issue, it seems that so far at least, the prospect of an impending war is not affecting the purchase decisions of Western European car buyers according to the automotive analyst and forecaster DRI-WEFA.
DRI-WEFA says that the current state of the European new car market shows no real signs of consumers being spooked, with the running rate trending down but well within the expected (prewar scenario) forecast range.
DRI-WEFA estimates that the September 2002 new car market will match the 1.3 million units of last year. The company adds that on a day-adjusted basis, this leaves the real rate of negative growth closer to -5% and a trend-running rate at just over 14 million units.
DRI-WEFA points out that for the 12 months to September, the market fell some 3.7%, with only 4 out of 16 markets still in positive territory.
Even with the strong boost from the booming UK market, Europeans have bought one-half million fewer cars so far this year than last. However, DRI-WEFA says that the ‘ongoing flaccid demand can be attributed to persistent economic weakness across a broad spectrum of the European market’.
The poor performance of the German economy is noted as a major thorn, but other countries are suffering also from cyclical demand woes, with Italy a particular problem. Italy’s new scrapping incentive allowed the car market there to record its first increase this year in September.
Echoing the recent gloomy prognosis of the IMF, DRI-WEFA warns of a significant weakening in the European economic picture, with GDP growth in 2002 failing to reach even 1%. GDP growth is forecast at under 2% for 2003.
DRI-WEFA says that sales will continue to drift down over the coming months with a European car market of 14.3 million units forecast for 2002 – 3.3% down on last year. A further market contraction of 1.5% is forecast for 2003 and the forecaster says there is ‘significant downside risk’.