Car deals slump as austerity hits, says PwC
That’s the verdict of PwC’s Autofacts automotive research group following the publication of weak sales figures for July, which leave the year-to-date figure an anticipated 1.9% down on 2010, as the reality of austerity measures started to bite and the escalation of the debt crisis further dampened consumer and economic expectations.
The UK market saw sales fall in July for the 13th consecutive month as a result of weak private demand and low consumer confidence. In Italy, where the expectation six months ago was for a flat market in the second half of 2011, sales fell by 10.7% in July, resulting in the lowest July registration figure since 1983.
Spain is a similar picture. Registrations fell heavily in July 2010, due to the 2% increase in VAT and the ending of the scrappage scheme, and yet fell by a further 4% in July 2011. This is the lowest for the month since 1995, reflecting the high levels of unemployment, weak economy and impact of the debt crisis.
Germany, by contrast, remains the bright spot in Europe, with car sales up by 9.9% in July and 10.4% for the year to date. PwC Autofacts forecasts growth of 9.4% for the full year but Germany is unlikely to remain immune to the impact of a deteriorating economic and financial situation in much of the rest of Europe and this could result in the full year figure falling slightly short of this performance.
Some of the mid-sized European markets such as the Netherlands, Sweden and Switzerland provided strong growth in the opening months of the year. However, Sweden has now experienced two months of decline and the Netherlands and Switzerland are slowing noticeably.
Michael Gartside, PwC Autofacts senior analyst, said: ‘With the demand picture deteriorating further in three of the top five markets, Italy, Spain and the UK, and the mid-tier markets now slowing, we have reduced our full year outlook for the EU and EFTA new car market to 13.4 million units; a fall of 2.7% on 2010.’