Economic Outlook n° 1188 | Special Report | Transport: a two-speedworld
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After the brief “scrappage premium” boost in 2009, the Europeanmarket resumed the downward trend that began in 2008.
4 Europe
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▶ Adepressedmarket over the long term Before the crisis, European automobile registrations averaged between 15.5million and 16million units per year. Since the crisis, the market has steadily contracted, despite the brief surge fromthe scrap- ping premiumin 2009. The current annual trend is forunit sales of around 12.6million, down7%relative to 2011, and the 2013 forecast calls for yet another slight contractionof around3%. InadditiontoGreece, where unit sales fell to 64,000 per year after a high of 280,000 per year before the crisis, the rest of Southern Europe is suffering. Unit sales fell bymore than half in Spain and Portugal, and in Italy they contracted by more than 40%. In the United Kingdom, unit sales fell by nearly 20%. In France the marketwas supported through substantial discounts and rebates, but the decline is ongoing. Against this very dark backdrop, only Germany has been able to maintain registrations above the 3millionmark.
▶ That requires adjustments to production capacity This substantial,more than 20% contraction in the Europeanmarket corresponds to a drop in European sales of approximately 3.5millionvehicles,whichwill clearly affect the profitability of carmanufacturers as well as their production plants. Passenger car pro- duction in Italy has been reduced bymore than half
PV registrations in Europe year-on year in millions of units forecasts
PVregistrations inFrance year-on year in millions of units
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But Europecontinues tosuffer
since 2005 (to slightly above 400,000 per year) and a production plant was closed (Termini in 2011). In France, productionwas also cut in half (to 1.5million units) andmajor restructuring operations have been announced by PSA, with the announced shut-down of the Aulnay plant in 2014. In addition to the situa- tion in Italy and France, a significant portion of the European automotive industry positioned as gene- ralistmanufacturers needs to deal with the current production overcapacity, as Opel did by closing its Antwerp plant in 2010 and as Ford recently announ- ced with the scheduled closing of its Genk plant in Belgiumby 2014.