Automotive production down 35%

In the first quarter of 2009, automotive production fell by 35%, according to the ACEA. While fleet renewal schemes have helped segments of the passenger car market in some countries, overall vehicle demand in Europe went further down as well.

Production of motor vehicles declined by 35% in the first quarter of 2009, with many manufacturers continuing to reduce stocks and cut output in light of reduced market demand. Van (-57%) and truck production (-56%) dropped even more than the manufacture of passenger cars (-31%).

As the European economy stayed in recession, market demand for vehicles continued to suffer: over the first quarter, new passenger car registrations dropped by 17.2%, new commercial vehicle registrations by 35.7%; five months into the year, the decrease was 13.9% for passenger cars and 37.6% for commercial vehicles.

Reflecting consumer concerns about the general economy, small cars reached a market share of 44.9% in the first five months of 2009, surpassing the record of 38.8% over the whole year 2008. At the same time, Diesel cars market penetration dropped to 46.1%, and the market share of 4x4s to 8.4%.

While the outlook for the second half of 2009 remains uncertain, current developments imply that production may fall as much as 25% over the whole of 2009 for passenger cars, and at least 50% for commercial vehicles.

Given the importance of automotive for Europe, it is clear that further difficulties for the sector will continue to negatively impact the whole of the economy. While 2.2 million workers are directly employed in automotive manufacturing, the ACEA report underlines that an additional 9.8 million rely on the industry for their jobs in closely relatedsectors. The effect on employment in the wider economy is even greater. ACEA members generate a turnover of €551 bn, and total industry exports are worth €77bn. Around €381 bn in taxes come from motor vehicles in Europe, making them a crucial source of income for governments as well.