EU automotive output to rise by almost six percent in 2010

Automotive output in the European Union may rise by almost six percent in 2010, according to the Economic and Steel Market Outlook 2010-2011/Q2 2010 Report from EUROFER's Economic Committee, released by the European Confederation of Iron and Steel Industries (EUROFER).
 
EUROFER said that improving economic conditions in 2011 should provide support for sales, particularly in Central Europe. In combination with a relatively favorable outlook for export demand, output growth could be sustained at a growth rate of close to four percent in 2011.
 
EU new car sales rose by 7.9 percent year on year in the first two months of this year. However, in actual monthly sales volumes, the market has been gradually trending downwards from the 1.3 million units' peak in September last year to 975,000 units in February this year. To a large extent, this can be explained by the car scrapping schemes coming to an end in most countries. The impact on the German car market has been particularly strong with sales falling by almost 20 percent year on year in January-February this year.
 
However, the prolongation of car scrapping schemes in other countries such as France, Italy and the UK helped to offset this impact.
 
Commercial vehicle sales declined by almost eight percent in the first two months of this year. While the downturn in the EU-15 appears to be easing, demand in the new member states remained heavily depressed with sales falling by 47 percent in this period.
 
First estimates for Q1 2010 automotive production show EU output rising by almost 21 percent compared with the extremely low levels registered in the same period of 2009. The final quarter of 2009 had seen the first year-on-year growth in output since mid-2008. While the improvement in domestic EU sales appears to be fading, demand from markets outside the EU - most notably China, India and Japan - is picking up again. This trend is expected to continue in the second quarter. However, further weakening of domestic car sales due to the coming to an end of the temporary prolongation of car scrapping programs may result in passenger car output weakening again in the second half of the year. Moreover, the outlook for the commercial vehicle market has remained subdued: fleet renewal in recent years, still reduced transport activity and difficult financing conditions are putting the brakes on demand.