KEY MARKETS – BY KEY CLIENT SECTOR
While a review of the global economic situation sets the general context for the environment within which the meetings, events and business travel sectors operate, it is also important to evaluate the overall performance of those industries that create the greatest demand for our services and facilities. This section provides an overview of the state of health of some of those sectors that are key clients of the meetings and events industry.
Automotive
Levels of business and consumer confidence are reflected this year in auto sales in different markets. In Europe, this is seen in an overall fall in demand, estimated by the AlixPartners Global Automotive Outlook to be a decrease in demand of about a million units, to about 13.5 million new vehicles in Western Europe. That represents a fall of around 3.3 million units compared to pre-financial-crisis 2007. With the euro crisis now adding to the industry’s woes, AlixPartners further forecasts that industry sales are unlikely to reach 16 million units again before 2020.
However, the market decline in autos is not evenly distributed across Europe, according to AlixPartners, but has clear focal points. Belgium, Italy and France have experienced double-digit declines in sales, and have a continued negative outlook, whereas the decline in the UK, Germany and Spain has been relatively moderate, at between 0.8 and 2.4 percent. Meanwhile, the markets in Russia and Poland are growing, at least somewhat.
40 percent of the European auto plants overall are currently operating under their financial breakeven points and those plants with the lowest capacity utilization are to be found in France, Italy and Spain, but also in growing markets such as Russia and Turkey. Companies with the best performance are premium manufacturers and new, low-cost entrants, including those from Korea. It is the ‘volume’ brands that are under most pressure. In 2011 BMW achieved a profit margin of 11.8 percent with its successful premium positioning and Hyundai achieved a very healthy 10.4 percent as the most successful value brand. But volume brands, especially those heavily oriented toward the European market, are just barely profitable or losing money.
In the US, according to Booz & Company’s 2012 US Automotive Industry Survey and Confidence Index, the mood among auto executives is more buoyant, with more than 90 percent of respondents describing the current state of the industry as either ‘somewhat better’ or ‘much better’ than last year. The survey was completed in early March, and the industry’s consensus at that time was that US auto sales would reach 13.7 million in 2012—a nearly double-digit improvement over last year’s sales – but still considerably below the 17 million vehicles per year being sold prior to 2008.
Reed Exhibitions | EIBTM Trends Watch Report 2012 6
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