After a year of strong recovery of car sales in Europe, executives and the auto manufacturer’s association have turned anxious. Is it any wonder? The recovery in some countries in the European Union has stumbled.
The ACEA (European Automobile Manufacturers Association) leadership commented:
Last year, new passenger car registrations were up 5.7% on the previous year, reaching 12.6 million units. “This is significant because it was the EU’s first positive annual result since the financial crisis began in 2007, with December marking the 16th consecutive month of growth,” said ACEA President, Carlos Ghosn. “However, our optimism about this early sign of recovery must be tempered with caution, given the economic uncertainties still facing many countries.”
ACEA expects growth to continue in 2015, but at a considerably slower pace, with a year-on-year forecast in the region of 2%. In terms of units, this would mean edging closer to the 13 million units mark.
ALSO READ: States With the Highest (and Lowest) Gas Taxes
Ghosn has skin in the game. He is the chief of both Renault and Nissan. Renault is among the largest car manufacturers in Europe, and Nissan has a modest presence in the market.
Putting the forecast in context, the U.S. market is expected to produce 16.5 million car and light truck sales in 2015. If January sales numbers are an indication, in some months sales growth in the country will reach over 10%. The United States has been the bright spot for car companies over the past two years. As the second largest market, it trails only China, where uncertainty about government incentives for car purchases and the problem of air pollution loom.
The challenge of Europe includes, particularly, Volkswagen, which holds market share of nearly 25% in the region. U.S. manufacturers have reason to worry as well. Europe has become an important market for Ford Motor Co. (NYSE: F). General Motors Co. (NYSE: GM) also has a large presence there, although its trouble with market share continues year after year. A slowdown in Europe would make a GM turnaround there close to impossible.
As Europe’s economy moves back into a danger zone, based to some extent on deflation and national debt levels that are still too high, the ACEA forecast may be too high as well.
ALSO READ: 9 Cars That Disappeared in 2014
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
