A sharp downturn in motor vehicle and parts production is observed in the growth of economic activity since the early 2011 according to Economics Department of the Organisation for Economic Co-operation and Development (OECD).
Accordingly, after declining sharply following the onset of the global crisis, car production has recovered gradually since the latter half of 2009, helped by considerable direct government support as well as the boost to demand provided by assorted temporary car scrapping schemes to encourage new sales. In the first quarter of 2011, car production in the United States and Germany was over 20 percent higher than a year earlier, with production in the United Kingdom and France having risen by 16 percent and seven percent, respectively.
In May 2011, the global recovery was projected to gain further momentum only slowly, with the adverse supply-side shocks from high commodity prices and the earthquake and its aftermath in Japan expected to result in lower activity in the second quarter of 2011, including car production and sales. In particular, anecdotal evidence was already starting to appear that the supply-chain effects of the Japan earthquake could be larger than first assumed.
After having risen steadily through 2010 and the early months of 2011, new car sales have also recently weakened in several economies. Combining sales data for the United States, Japan, the euro area and China, OECD affirms that the level of sales in April and May this year was only marginally lower than in the same period a year ago, but around 4.75 percent lower than that in the previous two months.