Western Europe Sales Prospects Look Healthy After April Dive.
Diesel Slide Looks Containable
“Elsewhere in Europe, the signs look much more encouraging, especially if the political backdrop continues to brighten as per the French Presidential election”
Prospects for car sales in Western Europe this year are being ratcheted down slowly despite April’s steep 8 per cent drop, and most forecasters expect a modest increase for the year of between 1.5 and 3.4 per cent.
Latest sales looked bad because there were two fewer selling days in April compared with last year.
Diesel sales have moved from threatening to fall precipitously, to a more gradual long term demise.
Citi Equity Research is the most optimistic forecaster at plus 3.4 per cent.
“We might be more worried about April’s stalling growth were it not for the fact that nine of the 12 auto related economic indicators we track in Europe are in positive trends. It’s not over yet,” said Citi Research analyst Michael Tyndall.
At the other end of the scale, Barclays Equity Research with 1.5 per cent said this was despite a likely decline in Britain of 4.3 per cent.
“Elsewhere in Europe, the signs look much more encouraging, especially if the political backdrop continues to brighten as per the French Presidential election,” said Barclays’ analyst Kristina Church.
Church’s comments were made before the results of the German election in North Rhein-Westphalia where Chancellor Angela Merkel’s CDU took 33 per cent compared with the SPD’s 31.5 per cent, ahead of September’s general election.
Slap bang in the middle was LMC Automotive with its forecast of 2.4 per cent growth in Western Europe, down from its previous month’s 2.7 per cent prediction.
“With reasonably solid economic news from key economies in the region, we are not too concerned at this stage that the weak April result will persist, and still expect full year growth for the region,” said LMC Automotive analyst Jonathon Poskitt.
Barclays Church said diesel’s share of new car sales of 46.1 per cent in April was the fifth straight month of declines greater than 3.5 percentage points. Church described the fall in diesel as manageable if gradual, and expects it to fall to 27 per cent by 2025.
“Whilst 2017, like last year, will likely have a faster rate of decline, we expect it to moderate from 2018. It would take a sharper decline to threaten the delivery of 2020’s CO2 targets and necessitate a bigger shift into lower-margin hybrid sales, in our view,” Church said.