Next summer, European automakers will see the start of a sales recovery from the double-dip recession that has gripped Europe since May 2008, market experts say.
“We expect Western European car demand to begin recovering in the second half of next year, possibly from July,” said Jonathon Poskitt, European sales forecast manager at J.D. Power and Associates.
In the first six months of 2011, Poskitt expects sales in Western Europe will decline 6 to 7 percent. But in the last six months of the 2011, sales will grow 3 to 4 percent. For the entire year, Poskitt expects sales to decline 2.1 percent to 12.6 million units.
Other experts are slightly more optimistic on the timing of the uptick. Stuart Pearson, a London-based analyst for Morgan Stanley, predicts the downturn will hit bottom in the first three months of 2011, then “gradually ease thereafter.” Nevertheless, Pearson expects a 3 percent sales decrease in 2011.
Market data indicates that European auto sales are in a W-shaped downturn, also known as a double-dip recession.
Looking at monthly sales by ACEA, the European automaker association, sales in the EU began falling in May 2008, before the global financial collapse triggered in September 2008 by the collapse of Lehman Brothers.
Sales subsequently fell for 13 months in a row until May 2009. Demand began to recover in June 2009, when scrappage incentives in France, Germany, Italy, Spain the United Kingdom lifted the European market.
After ten months of growth, demand leveled off in March 2010, then started falling again in April as government incentives expired. Since then, sales have remained weak, creating the second dip in Europe's W-shaped automotive downturn.
In the third quarter of 2010, sales in Europe declined 13 percent to 3.1 million units, according to ACEA. Judging by October sales, the fourth quarter looks weak, too.
In October, the seasonally adjusted annual sales rate (SAAR) plunged to 12.4 million units, down from 16 million units in December 2009, according to data from Morgan Stanley.