The Euro-Trashed Auto Market
After two months of declining sales, analysts are losing faith in the European market. They predict that the down cycle could last until sometime in 2009. That's bad news for everyone, but it comes at a particularly bad time for America's automakers, who are banking on overseas sales to make up for a moribund US market. The Detroit News reports that Europe accounted for nearly a quarter of GM's global sales last year at 2.2m units, while Ford's (non Jag/Landie) brands sold 2.4m vehicles in the Eurozone. And though overall European sales are down only two percent on the year, declines have been increasing, with eight percent drops in May and June. The European automakers' association predicts a 2.7 percent decline this year, though individual executives say it could be as much as four percent. "Having seen the developments in some European markets in the last six to eight weeks, I think it could be worse than that (four percent decline)," Daimler's Dieter Zetsche told analysts during a quarterly earnings conference call. Even the once-hot eastern European markets are declining, eliminating further opportunities for European sales growth. Which means the D3 have less opportunity to squeeze sales from abroad while the American market corrects itself. Not good.
But third world markets are growing. Argh... it's emerging markets. LOL Of course, the volumes are much lower than in Europe. And Chrysler doesn't sell many cars there... In fact they're selling less...
The only suprise is that it's taken so long for the European market to slow considering everything that's happening in the US is happening in the EU too. Housing market's collapsed due to credit crunch and Spain, Portugal badly affected also by the strength of the €uro which hurts the Brits badly as they've been buying holiday home all over southern Europe with a strong pound and cheap credit Credit crunch - all know about that. Banks won't lend to you unless you're rock solid, and if you are you ain't that dumb to take on more debt at the moment Energy costs becoming unaffordable - example in the UK this week,domestic gas,(the gas kind not liquid kind) increasing 35% this week - similar story elsewhere on 'the continent' Green taxes - all the govts love them and just pile them on and on and on. heck - the UK just made them retrospective to cars built since 2001. I suspect that the phones and emails from Detroit to their European arms is "don't care where the market is going - your profit target is unchanged, hell, it's just been increased 20% so send the cash now, preferably in €uros".
The Swedish economy has just started to feel some preassure, until now it been only smiles. By the way, I saw a Cadillac BLS station wagon this weekend!
I have also seen a BLS wagon.