Car sales still up

Press, 7 October 1988, Page 30

Car sales still up

MALCOLM WHITTAKER,

of Reuters, reports

from Paris:

Leaner times may be in prospect for Europe’s carmakers. Record sales seem to be peaking, and Japanese exports pose an ever stronger challenge. In the first eight months of 1988, new car registrations in Europe, at 9.01 million, were 5.4 per cent up on the same period last year. After last October’s “Black Monday” stock market crash, no-one had dreamed that car sales could keep going sharply up.

In West Germany, Europe’s biggest market with 21 per cent of total sales, business was indeed down 2.6 per cent in January-August.

But for the rest of Western Europe, industry estimates see last year’s record of 12.4 million new cars sold being beaten. In France, where stateowned Renault had forecast a 10 per cent fall, sales are expected to be up around two per cent on 1987’s record 2.11 million. Renault’s new R-19 model is among the stars of this year’s Paris Motor Show, held from late September to this week.

But many industry analysts at the show said

they thought the glow of good times was fading, and that all European markets would weaken in 1989 with stronger competition, especially from Asia. A recent survey by securities house Goldman Sachs in London saw a downturn in total European car registrations of seven to eight per cent between 1988 and 1990, falling to 11.6 million in 1990 from 12.7 million in 1988. The industry is concerned that as the European Community moves towards its goal of a single market by the end of 1992, overseas producers — particularly Japan — will capture a bigger slice of declining demand. Japan exported 1.17 million vehicles to the European Community last year and seems set to hit 1.23 million this year. That would represent market penetration of about 10 per cent against the E.C.’s 2.5 per cent of the Japanese market with about 115,000 vehicles. In Britain, which along with Spain is the fastestgrowing European market, analysts say the biggest rise in output is likely to come from Japanese Nissan’s English subsidiary which plans to make 200,000 cars in 1992, up from 55,000 this year. Analysts also note that British car output has risen as American giants Ford and General Motors switch production to British subsidiaries from continental plants in response to a stronger West German mark and better labour relations in Britain. “If the British continue their momentum, they are going to become the leading European market,” says Jacques Calvet, chairman of France’s private-sector carmaker Peugeot SA. He predicts that British new car registrations will hit 2.2 million this year, the fourth successive record year. In Spain, car registrations should exceed one million this year for the first time, up from 920,000 last year