According to the Economic and Steel Market Outlook 2016-2017/Q2 2016 Report from the Economic Committee of the European Steel Association (EUROFER), the EU automotive market started 2016 on a high note with increasing sales. Passenger car registrations increased by 8.2 percent year on year in the first quarter this year. France and Italy posted double-digit gains, but the other key markets also recorded robust growth. Commercial vehicle registrations rose sharply over the first two months of the current year, total sales went up by 15.4 percent year on year, with particularly a strong rise in demand for medium and heavy trucks. All major markets posted significant gains.
EUROFER stated that in the fourth quarter of 2015 automotive sector output increased by 10.3 percent year on year, contributing to a better-than-expected growth of total automotive output of 8.3 percent in the full year of 2015. The outlook for this year and 2017 is positive, but a repeat of the strong output growth recorded in 2014 and especially in 2015 is not possible.
According to EUROFER, the positive trend in EU demand for passenger cars is expected to continue in the second quarter; however, the outlook for car exports is rather uncertain. Markets such as the US, which contributed in recent years to the strong performance of premium segment exports, could be nearing a sales plateau. Government initiatives aimed at stimulating demand in China and South Korea will pull forward automotive sales in the current year, but could backfire on demand in 2017. In addition, demand in Russia looks set to remain depressed for the time being, with domestic output, as in China, gaining market share.
Meanwhile, the ongoing economic recovery in the EU and lower cost of fuel is expected to stimulate road transport activity, which in turn will drive demand growth in the commercial vehicle segments. Fuel economy, road safety and a lower carbon footprint will continue to drive innovation in this market segment. Total EU automotive output, including parts and components, is forecast to rise by three percent in this year and by 3.8 percent in 2017.