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European Car Sales Slide Relents In April; What Next?

Ghosn Says No Recovery Likely Before 2016
Credit Suisse Says Stocks Build Contradicts Recovery Talk

Is there a danger of missing the first green shoots of recovery in Europe?  Not according to Carlos Ghosn, CEO of Renault-Nissan, nor Credit Suisse analyst Erich Hauser. Morgan Stanley analyst Stuart Pearson comes closest to seeing signs of recovery, but he steps back from the eureka moment saying we will have to wait until the end of the second quarter for critical evidence.

“I think 2013 is going to be tough and I don’t foresee any growth in Europe probably before the 2016, or even later,” Ghosn told a news conference in Yokohama, Japan.

“We think the European consumer lacks confidence. The European consumer is confused, he doesn’t know when Europe is going to get out of this crisis and until he sees or understands what’s going on in Europe, I don’t think he’s going to buy cars,” Ghosn said, quoted by Reuters.

Credit Suisse’s Hauser says vehicle stocks are rising, and that contradicts  talk of a second half recovery.

“We show that inventories for the industry have grown faster than normal with 103 days supply for the overall industry at the end of the quarter as European production, down eight per cent, once again fell less than demand – minus 9.7 per cent. Yet despite the increase in vehicle stocks and the slower than expected start to the year, manufacturers and suppliers alike remain resolutely bullish about production recovery from the second quarter onwards,” Hauser said.

Hauser predicts a double dip in E.U. production with the third quarter slowing again.

Morgan Stanley’s Pearson wonders if April’s surprisingly robust sales mark the end of the trough? Pearson said the latest available data points to a flat outcome for April sales, compared with the previous weakness.

“For now the evidence, while encouraging, is not nearly sufficient to call a European trough. May/June sales figures will remain key,” Pearson said.

 Neil Winton – May 15, 2013

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