Could Europe’s Flourishing Auto Industry Fall Flat on Its Face?
According to most experts, 2015 has been a good year for Europe’s auto industry.
With the economy expanding and companies like Ford, Volkswagen, and PSA Peugeot Citroen releasing new models, the automobile market has seen a remarkable upswing in sales.
This year, car registrations rose from 1.23 million to 1.41 million, an increase of about 15%.
With this increase in sales, the European economy seems to be growing once more. The 19 countries using the Euro are seeing the greatest period of growth since 2009. This is especially true in places like the UK, where unemployment is at the lowest it has been in seven years.
The European Automobile Manufacturers Association (ACEA) has predicted that the growth will only continue, projecting a 5% increase in growth within a majority of the European nations, plus Switzerland.
Recent reports, however, have found this data to be misleading.
According to the Wall Street Journal (WSJ), the recent surge in sales may be more of a statistical result, correlating with the amount of working days in recent months.
The WSJ reports that despite the recent and palpable surge, the numbers aren’t good as they seem.
And things are only going to get worse. Why? Colin Couchman, an analyst with researcher IHS Automotive, tells WSJ the culprit may be buyer’s fatigue.
While European recovery is indeed palpable, only a small sector of Europe is driving this recovery. Namely, Western Europe.
Even still, the European auto industry has seen faster growth in comparison to China and the United States.
Though car sales actually did rise in the U.S. — a growth that has been attributed to the millions of cars sold online each year in the United States on sites such as Ebay Motors and Carsdirect.com — the 4.4% increase came nowhere near matching Europe’s progress.
In China, the auto industry saw a 5.9% rise in the first half of 2015, but continued to see a 2% decrease in June. After years of growth, those numbers are considered a sizable decrease.
Russia is the biggest loser of the auto industry this year, as car sales fell 40% within the last six months.
As far as predictions go for the success of Europe’s auto industry, only time will tell.