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Car sales likely to fall short of target as recessionary fears hit UK and wider EU

By / 9 years ago / Latest News / No Comments
Automotive experts at PwC say recessionary fears are likely to drive down UK car sales to below 1.9m next year. This compares to PwC’s forecast of 1.935m this year and 2.03m in 2010. 
PwC’s monthly European car report also linked Poland’s poor sales performance to householders having CHF, Swiss Franc, denominated mortgages. Despite continuing to be one of the most resilient economies, with stronger economic growth than many EU countries forecast for this year, the market continues to fall heavily. Registrations in Poland fell by an estimated 20% in November, taking the year to date fall to around 8.7%. 
Michael Gartside, senior analyst with Autofacts, PwC’s automotive forecasting service said: 
'Market developments continue to differ widely with the UK and France continuing to prove more resilient to the deteriorating economic and financial environment than initially expected. In contrast, despite the stronger economic performance and outlook in Poland, the market there is falling heavily. Some of this weakness may be attributable to a large number of households having CHF denominated mortgages. With the strong appreciation of the CHF against the Zloty, this has significantly increased mortgage payments and reduced household disposable incomes along with these households' ability to purchase new cars. 
'The UK is showing surprising resilience in the face of increasing economic and financial headwinds, with the SAAR (seasonally adjusted annual rate) in November standing at 2.14m units, the highest level this year and the fourth consecutive monthly increase. Whilst this may appear to suggest a market nadir has now been reached, we feel that the increasing risk of recession within the UK, with declining consumer spending, is likely to push the UK new car market below 1.9m units in 2012.'
Elsewhere in Europe, the Italian new car market registered 132,579 units in November, a 9.2% fall on November 2010. Year to date, the market has fallen by 10.6%. In France, registrations fell by 7.6% in November to 179,160 and in Spain, registrations fell by 6.4% to 60,395 units, with private demand falling by 9% while company cars fell by 4.5%. 

PwC’s monthly European car report also linked Poland’s poor sales performance to householders having CHF, Swiss Franc, denominated mortgages. Despite continuing to be one of the most resilient economies, with stronger economic growth than many EU countries forecast for this year, the market continues to fall heavily. Registrations in Poland fell by an estimated 20% in November, taking the year to date fall to around 8.7%. 

Michael Gartside, senior analyst with Autofacts, PwC’s automotive forecasting service said: 'Market developments continue to differ widely with the UK and France continuing to prove more resilient to the deteriorating economic and financial environment than initially expected. In contrast, despite the stronger economic performance and outlook in Poland, the market there is falling heavily. 

'Some of this weakness may be attributable to a large number of households having CHF denominated mortgages. With the strong appreciation of the CHF against the Zloty, this has significantly increased mortgage payments and reduced household disposable incomes along with these households' ability to purchase new cars.

'The UK is showing surprising resilience in the face of increasing economic and financial headwinds, with the SAAR (seasonally adjusted annual rate) in November standing at 2.14m units, the highest level this year and the fourth consecutive monthly increase. Whilst this may appear to suggest a market nadir has now been reached, we feel that the increasing risk of recession within the UK, with declining consumer spending, is likely to push the UK new car market below 1.9m units in 2012.'

Elsewhere in Europe, the Italian new car market registered 132,579 units in November, a 9.2% fall on November 2010. Year to date, the market has fallen by 10.6%. In France, registrations fell by 7.6% in November to 179,160 and in Spain, registrations fell by 6.4% to 60,395 units, with private demand falling by 9% while company cars fell by 4.5%. 

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