European Automakers Believe Market Has Finally Hit Bottom

July was the first month in ages that some major Western European auto markets have showed growth. German sales increased by 2%; France was up 1%, and Spain was up 15% thanks to a government incentive program. Automakers predict that the European auto market has finally reached its nadir and will slowly begin returning to pre-financial crisis levels. 

“We’re not predicting any upturn yet, but there are certainly some good indications. Our prediction would be that we’re at or close to the trough," said FordFordUnited Kingdom, 1909 > present33 models
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of Europe CEO Stephen Odell.

Analysts at IHS Automotive and Morgan Stanley have released reports agreeing with Odell. They believe that the European market will grow slowly, but peak 2007 sales levels will not return until after 2020.

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-RenaultRenaultFrance, 1898 > present189 models
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CEO Carlos Ghosn is not as optimistic. He believes that the high levels of unemployment among young people in West Europe will sap auto sales for years to come. People in need of a new car will buy one in the short term, but the European auto industry will take decades to recover. 

"We may see another decrease -- maybe not as violent or as deep as the ones we have seen for the last years.”

"Rising unemployment will continue to sap consumer demand. I am preparing Renault for several years of market stability – at best," said Ghosn.

Ghosn's pessimism is being echoed by industry analysts who believe that the European auto market will have no growth through the end of the decade.

“Flat is the new up. The good news is that the decline will stop but the bad news is that it will not get better anytime soon," said market analyst AlixPartners.

Source: Automotive News Europe