Europe's battered car market is set to grow in 2014 after its six-year slump, which may ease retail pricing pressure that has saddled some of the region's carmakers with losses that will weaken them for years. Automakers and industry watchers expect vehicle sales to increase by up to 3 percent this year. The rebound will bolster the industry's bottom line, particularly for automakers such as Fiat and PSA/Peugeot-Citroen that are most exposed to the deep recession in southern Europe.
With economic conditions showing a tepid recovery in most European countries by the end of 2013, buyers are finally starting to feel confident enough to make a long-delayed purchase of a new car – albeit at discounts of up to 24 percent. Click on the file (above, right) to download information on percentage discounts in key European markets.
Ford of Europe sales and marketing boss Roelant de Waard said the heavy discounting that has hit automakers' profitability may ease in 2014. "Once the difficult decisions to close factories by the various manufacturers are executed, I think you'll start to see a healthy price level," he told Automotive News Europe.
Hyundai Europe Chief Operating Officer Allan Rushforth told reporters last month that the European car market is challenging and will remain a "competitive environment in the months to come." Hyundai predicts a 3 percent rise in European vehicle sales for this year.
"Discounts are tapering off but will continue through 2014," said Carlos Da Silva, head of European light vehicle forecasting at IHS Automotive, which is predicting a 2.5 percent sales rebound in 2014. Click on the file (above, right) to download a long-term sales forecast for key EU and EFTA markets.
Carmakers come into the modest recovery leaner as Ford Motor, PSA and Volvo closed plants in 2013. Ford has eliminated 18 percent of its European capacity, General Motors about 20 percent and PSA 13 percent.
In addition, GM decided last month to withdraw its Chevrolet brand from Europe at the end of 2015, which means competitors will be able to try and win some of Chevrolet's annual sales of about 175,000 units in the region.