Automotive Blog

China revs up, the USA is on the road to recovery - but Europe is stuck in neutral or reverse gear

130227 China Revs Up , The USA Is On

The EU15 car market continues to stutter and falter – with major problems being faced in Italy, Spain and some of the smaller mature markets such as Greece, Ireland having a significant effect on Europe’s car sales and presenting Europe’s motor industry with headaches of hangover proportions post 2007. There is no sign at present that the European car sales malaise will abate – despite the relative stability of Germany, the UK and some smaller markets such as Austria, Denmark, Finland, the Netherlands and Sweden.

The American engine powers back to recovery with the market heading towards 16 million again – though sub-prime is growing once more…

Given the European problem, China’s meteoric rise in passenger vehicle sales since 2008 outpacing the USA is stunning and a major bonus underwriting the income of those European (and American) manufacturers which are exploiting it.

However, the question is when will the Chinese market level off and, indeed, whether it will overheat and face some short term decline? Even China’s spectacular growth might not be immune to the adverse effects of a sub-prime-fuelled credit boom and property bubble in the short term as well as the move away from top of the range gas guzzlers to more economical and eco-friendly , but less profitable models.

Written by Peter Bailey

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