ExpertEye European Automotive Report Q3 2016 | Page 28

Outlook

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Economic Climate
Since 2007 the global economy has been dominated by the banking crisis with the solution dictated by the political establishment but in
2016 we have seen a significant change. The Brexit vote followed by the Trump election seems to be driving a nationalistic pride and
protectionist approach which goes against the perceived natural order and benefits of industrial and economic globalisation. With the
forecast collapse of the British economy failing to happen following its vote to leave the EU
other countries electors are now starting to consider the concept of taking back previously
centralised control of their economies. The fact that the EU extended and failed to punish
Portugal or Spain for exceeding their budget deficits by more than 50% is a clear demonstration

Rise in national pride….Globalisation
backlash
New vehicle sales slowdown in growth
over next three years

of the desire for Brussels to avoid further accusations of local interference.
With the ongoing banking crisis in Italy and Greece together with high budget deficits in Spain and Portugal the European economy remains
strained. Immigration has also become a political issue and there seem to be a growing sentiment in a number of better performing
countries that they are subsidising the weaker economies of others, the Hecksher-Ohlin effect. This means we may well see yet more
political upsets and with Italy, France and Germany all going to their electorates in the next twelve months the end of this decade so see a
very different European operating model to how the decade started,
New Vehicle Sales
The slowdown in growth across Europe has accelerated slightly faster and earlier than previously thought and we now believe the EU28 and
EFTA3 will see a 2016 7.6% increase in new car sales to around 15.3 million. The rate of growth is forecast to continue to slowdown over
the next couple of years, rising just 5.1% to just over 16 million in 2017 and a 1.8% rise in 2018.
Total Commercial Vehicles sales have also seen a slowdown in growth and our predictions remain relatively unchanged with 2016 expected
to see the EU28 and EFTA 3 ending the year up around 11%, with 2018 growth potentially being around 8%.
European Automotive Report - 2016 Quarter 3

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