European light vehicle production is estimated to rise 1 percent to 1.36 million units in January, the fifth consecutive month of higher output in the region, according to data published by PwC Autofacts.
BMW, Fiat, Ford and Volkswagen were forecast to have the biggest production increases on strong demand for models such as the Fiat 500X, BMW 2 series, Ford Fiesta, VW Golf and Golf Sportsvan as the region’s auto market recovers and demand remains buoyant in North America and Asia.
Higher output not only helps bolster the European economy, currently at risk of sliding into prolonged deflation, it also helps to maintain jobs in the industry.
“Things are going well. Look at the suppliers, they are hurting because they cannot make enough parts,” said Christoph Stuermer, Autofacts global lead analyst at PwC.
The 1 percent increase is encouraging since production had already soared 25 percent higher in December as carmakers worked the whole month through to keep up with demand and stock showrooms with their latest models. Often, however, economic statistics for industrial production can show a swing in the opposite direction after a large movement the month before, as managers look to steer inventories from either swelling up or being depleted too quickly.
“December was completely crazy since a lot of plants powered through the Christmas holidays. VW is lagging behind (demand) with the Golf, the Opel Corsa is ramping up, the C class is another driver,” Stuermersaid. “It’s a real positive sign. It was an extraordinary month, because a lot of holidays were cancelled and people had to work through.”
Because of the gradual recovery, Ford of Europe said earlier this month it would boost production at its two German plants in Cologne and Saarlouis by a total of 540 cars a day as of February, after putting some of its workers on furlough in the fourth quarter.
Fleet buyers in particular are driving the market. Last week Dataforce published figures that showed corporate and company car buyers in Europe’s five largest car markets increased their combined purchases by 12 percent in December compared with a gain of just 1 percent for private car buyers. As a result, the share of the new car market from fleet customers increased to 24.7 percent in 2014 from 23.2 percent in the previous year.