Volkswagen And Renault Fear Emerging Market Slowdown
European car sales are showing the first signs of a real recovery after a six-year sales slump as even those countries hit the hardest by the euro zone debt crisis move out of recession. Figures from UK, Germany, Italy and Spain all rose significantly last month, although this was not the case in France.
Jerome Stoll, Renault’s sales boss, said the company was experiencing ‘headwinds’ from its newer markets. It is no secret that the emerging markets and in particular the so called BRICS have kept some of the established European and American brands on the right side of the financial equation, but now there is concern that this may be coming to an end.
Christian Klingler, the sales head for Europe’s largest car manufacturer, Volkswagen, said, “Some countries have seen their currency devalue by up to 35% and that will always have a consequence.”
There has been a pronounced slowdown in Russia in recent weeks over concerns about the Ukraine, but markets such as Brazil have also seen a slowdown and India has seen a massive reversal of fortunes for car manufacturing companies. It may not be all doom and gloom though. There is still expected to be growth in the sector as there is growing demand in the US of A along with continued demand in China. After all, these are the two biggest car markets in the world.
“We have seen the levelling out in western Europe over the last year and the very first sign that it can become stronger now,” said Ralf Speth, the Chief Executive of Tata Motors-owned Jaguar Land Rover. “We’re seeing the US recovering more, and we still see a very solid China,” he added.