BILBAO, Spain -- Government scrappage programs in Europe gave the auto industry a lifeline for 18 months. But those programs are over, so what happens now?
"There is not going to be a double-dip recession, but no one really knows what's going to happen," Ignacio Martin, CEO of Spanish supplier CIE Automotive SA, said here last week during the Automotive News Europe Congress.
"With all of the uncertainty in Europe, I think we'll be OK until September. After September, it's anyone's guess."
Said John Fleming, CEO of Ford of Europe: "Now the market is softening, and I think a lot of people are waiting to see what the results are."
Ford has been one of the main beneficiaries in Europe of government programs that paid owners to trade in old cars for new models.
But 10 consecutive months of year-over-year gains ended in April when Ford's sales fell 17 percent from April 2009 in the company's main 19 European markets.
Fleming expects the second quarter to fall to an annual rate of 14.7 million, which is about where the industry will end the year, he said. In 2009, new-car sales totaled 15.7 million in the major 19 markets. Fleming said scrapping incentives added 2.5 million sales in 2009.
Jean-Marc Gales, executive vice president of the French brands Peugeot and Citroen, predicted that the second half of the year would be "very weak" across Western Europe.
BMW AG is sticking to a forecast of single-digit percentage sales growth for 2010. "We're still cautious on the basis that the first five months were 14 or 15 percent growth," said Ian Robertson, head of sales and marketing.
Bill Kozyra, head of supplier TI Automotive, said his company is "cautiously optimistic." TI was prepared for a softening in the second half.
"And that may still apply," Kozyra said, "but the production releases in the short term show no suffering in 2010 like in 2009."
Douglas A. Bolduc and Luca Ciferri contributed to this report