December 2015 was the 28th month of consecutive growth in the region, helping it towards one of the best fourth quarters of recent years. Da Silva notes that two key positives can be taken from December. Firstly, there is a widespread positive trend with all the main markets clearly gaining. Secondly, the share of private demand continues to strengthen, even if it does stand at historically low levels in volume terms. This is important for markets like Germany or France which have been underpinned mostly by corporate and fleet demand. This tends to indicate that there is still pent-up demand left in the region.
However, the question remains as to whether this momentum is sustainable. IHS Automotive currently forecasts that during 2016 sales in Europe will continue to improve, but at a slower rate. One of the reasons for this is that pent-up demand has been being released for more than two years now, alleviating some of the most urgent pressure. In addition, the general environment remains uncertain. Da Silva says, "For sure the European economy is doing better and is expected to keep improving. However, it remains highly fragile: unemployment remains stubbornly high, most of the national debts problems have not been solved, austerity measures will keep having a lasting impact on populations, socio-demographic issues – the security and migrants ones for instance – are weighing on many political agendas… This makes for a very narrow road to be traveling on."
Nevertheless, he adds that there are some reasons for optimism. The European market is still well below its peak level and there is definitely room for growth. Even a slight improvement in confidence from both private and business players would have a decisive multiplying effect. In this context, if the region's economy stays on course and if the global economy reignites more markedly, growth could be much more substantial.
It will also be a very promising year in terms of product activity, says Da Silva. New or renewed models will keep feeding customers' appetites throughout 2016.
In conclusion, there is little doubt that 2016 should be a good year again for car sales in the EU.
Source: IHS Automotive
Timely, incisive articles delivered directly to your inbox.