Car Sales In Western Europe To Fall

Automotive consulting firm Autopolis has produced a report which predicts that the western European car market is going through something of a decline at the moment. 1999 was a record year, with 15.1 million vehicles being sold, but last year the market dropped by 2% and Autopolis says that the fall will continue this year and next, with sales dropping to 13.

4 million cars – a decline of 11% in three years. Top Ten Car Manufacturers In EuropeHowever, Autopolis’s Graeme Maxton sees no cause for alarm for the European decline. The USA and Asia, he points out, are also facing a sharp fall in sales and the USA is facing economic uncertainties, while Asia is looking at its second slump in three years.

Compared with this, the economy of Europe is strong and less vulnerable to troubles elsewhere in the world, so it should be able to take the predicted fall in its stride. Consolidation In The Industry The report also deals with the wave of consolidations and mergers among car manufacturers, which happened in 1998, and their effect on the companies. Seven firms are moving ahead of their rivals, accounting for 80% of new car sales.

VW is top and likely to stay there, predicts Autopolis, but the Renault-Nissan merger shot Renault from fifth place to second. The report also warns of possible danger for two companies – Fiat and DaimlerChrysler – who are not big enough to achieve meaningful economies of scale, but too large to maintain a defensible niche, saying that they risk falling into “limbo”. Figure 1 shows the top ten car manufacturers in Europe and their market shares, pre- and post-mergers, plus a prediction for the year 2005.