By Rob Starr, Content Manager, Big4.com
European Union and European Free Trade Association (EU+EFTA) new car registrations declined 15.4 percent to 843 thousand units in December, according to estimates from PwC’s Autofacts.While concerns around the debt crisis and Euro zone break-up have abated, austerity measures are still impacting economic growth, unemployment, and consumer confidence. These factors, plus political uncertainty in Italy, provide downside risks to the forecast that could push demand below 12 million units.
Giorgio Elefante, PwC automotive partner comments:
“During the past few years, automakers needed to cut costs throughout their organisations to offset the lacklustre sales throughout Europe,” he said . “To consolidate costs, many automakers announced plant closures and layoffs in 2012 to take effect in the coming years. We will begin to see these cuts taking effect in 2013. Automotive companies have trimmed any remaining fat and are now cutting into the bone to sustain their business operations. We will continue to see some challenges in 2013. However, we are cautiously optimistic that we are close to the bottom, and will likely begin to see improvement in the second half of 2013.”
In line with much of the rest of Europe, the German car market contracted in 2012. KBA data showed that new car demand fell by 2.9 percent to 3.08 million units for the full-year. The premium segment was affected the most and declined by 13.9 percent, whereas the mini (20.3 percent) and SUV (17.4 percent) segments recorded double-digit growth.
PwC has a global automotive practice that leverages its extensive experience in the industry to help companies solve complex business challenges with efficiency and quality.