Any resulting overcapacity may benefit fleets in terms of competitive pricing, but they could also see residual values damaged further.
The Global Vehicle Market Outlook: Post-Crisis Prospects Reassessed, produced by the World Markets Research Centre (WMRC), predicts which manufacturers will suffer most after the September 11 terrorist attacks on America.
As previously reported in Fleet News Europe, the rental industry is already suffering from the drop in tourism and air travel following the attacks.
'While the trauma of recent events effectively emptied new car showrooms for the following 10 days,' said the report, 'for the global automotive industry, the immediate shockwaves are now beginning to subside.'
'At manufacturing level, highly geared vehicle and component producers have acted swiftly to adjust output and to maintain parts supplies in a new era of high-security. As the industry gets back to work, it is time for a considered assessment of the revised outlook for global vehicle demand.'
Noting that 'few manufacturers will escape', the report says: 'At manufacturer levels, the companies which look most exposed in the medium term are inevitably those with greatest exposure to the US market. These include the Japanese suppliers and European prestige makes (BMW, Volvo and Mercedes-Benz brands) along with Volkswagen and, of course, Ford and GM.
'Fiat looks likely to suffer from the effects of the fallout in South America, while Renault's association with Nissan has left it more vulnerable in these circumstances. 'Other European brands such as Peugeot, Citroen, SEAT and Skoda remain comparatively well placed on this occasion,' the report added.
The report said that by the beginning of September analysts had expected new car sales for the year to total about 14.5 million units. However, the revised outlook is now 400,000 units less, with France and the UK, strong markets during the first nine months of the year, 'expected to register a comparative decline over the closing months of the year', said the report.
It added: 'A nascent improvement in Germany is expected to be eclipsed and the downturn in Scandinavia, Benelux and Ireland will deepen. The introduction of the euro could exert a further negative influence as it could be used to mask price rises in affected markets but, further ahead, selective tax cuts and the expected removal of block exemption regulations should exert an energising influence.'
The report adds: 'The European Investment Bank now appears more ready to cut interest rates but key European economies were already in trouble before recent events, and with the US hovering on the brink of recession, things can only get worse.
'The slowing US economy has already undermined demand for European goods and business confidence remains extremely weak, with takeovers being cancelled and further investment being put on hold.
'By the final quarter of 2002, however, on the coat-tails of the US recovery, a regional rise in demand will begin to exert itself.
'Of the major car markets only France and the UK will report full-year gains - 3% and 2% respectively - for 2001, with key German demand retreating 5% or 180,000 units. In 2002, Germany and the UK both look set to lose a further 250,000 sales.'
No sign of an immediate slump
DESPITE warnings by the World Markets Research Centre (WMRC) that new car sales will be lower than expected this year because of the US terrorist attacks, new figures produced by the European Automobiles Manufacturers Association (ACEA) show no sign of an immediate slump.
Total passenger car registrations for September this year were up 3.1% to 1,301,480 units - but the association admits it is difficult to predict the impact of the September 11 attacks on future European car sales.
'It is too early to interpret the impact of the aftermath on the European consumer confidence regarding car purchasing, as the time gap between orders and deliveries averages four weeks.
'However, some manufacturers in France, Germany and Italy have already announced production-cutting measures'.
'Total September figures were in line with the slightly positive trend seen so far this year,' ACEA added. 'However, the month increase is mainly due to an exceptional result in the United Kingdom, where registrations went up by 25.4% thanks to buoyant consumer demand.'
It found that France continued to show growth (1.9%) with registrations of 153,044 units. The German market fell by 3.8%, alongside many other European markets. ACEA said: 'Spain's market was quite flat (–0.7%) although demand is persistent and the cumulative figure remains positive (+2.6%). After its good results in August, Italy showed a significant decline of 10.9% to 163,200 units.
ACEA added that the cumulative figure of 11,601,483 units 'shows a flat nine-month growth with a variation of –0.5% compared to the same period in 2000. Hence, it should be noticed that total European car market registration figures still look better than US (–7.6%). (November 2001)