The fortunes of Europe’s carmakers, at least at the premium and luxury end of the market, have generally been buoyed by emerging markets, but sales of very high-end luxury cars such as Ferrari, Lamborghini and Bentley have been hit over the last few months. (Perhaps not the case in the US anymore…?)
China has given up its crown as Rolls Royce’s largest market, ceding it back to the US, as sales have slowed. The reasons are not clear, but an anti-corruption drive is being mooted as one cause for a sudden desire to avoid signs of conspicuous consumption.
Meanwhile, sales of Audis, BMWs and Jaguars have been going well, up 14% and 7%, respectively, while Jaguar Land Rover is the only European carmaker to post double-digit production growth, up 21% last month while the rest of Europe has stalled.
Auto sales in India have also been down. CNBC reports the once red-hot Indian car market softened for the first time in a decade over the past year, as domestic passenger car sales fell 6.7% in the year to March 2013 over the previous year, when car sales grew by just 2.2%, according to the Society of Indian Automobile Manufacturers.
The decline was a sharp slump on the 30% rise in sales seen in 2010-2011. Ford’s sales in India dropped 38% year-on-year in March, but have been made up by a rise in sales in China.
While China continues to grow at a slower but ultimately more sustainable rate, no one is predicting a sudden turnaround elsewhere. The European market is likely to remain depressed for another year or two at least, with Peugeot (which was predicting a further 5% decline earlier this year) now saying the situation has deteriorated further.
For metals markets, the only bright spot is fuel prices continuing to drive innovation into the use of high-strength steels and the migration to aluminum in an effort to lower weight, but for suppliers manufacturing at the commodity end of the market, supplying Europe’s mass car market the year ahead will not be good.