MUNICH -- Western Europes new-car sales could fall by 11 percent in 2010 compared with a 2 percent decline this year after scrapping schemes run out, a market research company says.
Car sales next year could fall as low as 11.8 million units -- a level last seen in the early 1990s -- from a forecast 13.29 million units this year, says J.D. Power Automotive Forecasting.
The steep 2010 decline would be payback after sales have been artificially stimulated by government-backed schemes in major markets such as Germany, France and Italy, the U.K.-based forecaster said. In those countries car buyers are being offered thousands of euros in cash bonuses to trade in old cars for new models.
Next year there will be a greater contraction in sales because there will still be a weak economy, but the incentives that have artificially fed the market will largely be gone, said Jonathon Poskitt, manager of European sales forecasts at J.D. Power Automotive Forecasting, in a telephone interview.
France, Italy and Spain have a history of incentive renewals and a continuation of these schemes is certainly possible, but it will be the German market that will make a difference. We dont expect the German scrappage scheme to be renewed, Poskitt said.
A 2,500 euro scrappage bonus introduced in Germany in February has helped to boost German new-car sales by 26.6 percent to 2.4 million in the first seven months, compared with a year earlier.
The booming German market has helped limit the year-on-year decline in western Europes car sales to 7.8 percent to 8.2 million in the first seven months.