Fiat and Ford are gloomy, but it’s sunny over at Bentley
Depending on which media agency you follow, you will have very conflicting views on the health and wealth of the European car industry this week. From the UK come announcements of ever higher sales, spurred on by renewed faith in the UK economy, which seems to be the powerhouse of Europe right now, according to some.
New car sales in the UK topped the 425,861 mark in September, a 5.6% increase from the same time last year, representing the 31st consecutive monthly increase and the highest number since the 2008 financial crisis. In fact, the crowded roads of the UK have had an addition of more than 2.1 million cars this year alone, a 9.1% increase for the first half of last year, as reported by the Society of Motor Manufacturers and Traders(SMMT).
SMMT Chief Executive, Mike Hawes, said, “September’s strong performance underlined the continuing robustness of the UK new car market, particularly in the context of last September’s bumper volumes. Demand for the new 64-plate has been boosted by intensifying confidence in the UK economy, with consumers attracted by a wide range of exciting, increasingly fuel-efficient, new cars.”
However, he warned that the market was beginning to slow. “In the months since March – which saw an 18% jump in registrations – the growth has shown signs of leveling off as the market starts to find its natural running rate,” Hawes said.
“If the new car sales are representative of the performance of the UK economy, there are further signs that confidence within the business sector is improving. Fleet and business car sales are now seeing the sort of growth that has been provided by private sales over the past two and half years. The UK market has consolidated its position as the second largest market for new cars after Germany and is almost a third larger than France in third place,” said David Raistrick of Deloitte.
Number one in the UK is still the Ford Fiesta, followed by the Ford Focus and then the Vauxhall Corsa, which is perhaps at odds with the profit warning issued by Ford for their European operation this week. On Monday, Ford said that its European arm would lose about US$1.2 billion (£750 million) this year, with losses narrowing to about US$250 million in 2015 despite, after three years of losses, the European division was expected to return to profit. The announcement saw Ford’s share price tumble as a result.
Ford is not the only automaker to try to manage expectations of lowered profits and sales. German carmaker, Daimler, cut its growth forecast for the global car market. Chief Executive Dieter Zetsche said that falling sales in Russia put the European car industry’s recovery in jeopardy. Martin Winterkorn, Chief Executive of Volkswagen, Europe’s biggest carmaker, also added to the doom and gloom with his prediction that total European car sales this year would be perhaps 13.5 million at best; in fact, he does not expect the market to ever return to the pre-crisis sales levels of 15.5 million.
The head of Fiat Chrysler car group, Sergio Marchionne, also added to the air of despondency, saying that the announcement by Ford had sent shock waves through the industry. Marchionne said, “I think there are issues that continue to plague Europe. I have never been a firm believer in the strength of Europe’s economic recovery. France and Germany were still at odds over some economic reform issues…until you get a unified view about how much reform needs to be carried out, carmakers face a prolonged period of unsettled demand.”
Not so back over the English Channel where the ‘Bentley-Boys’ seem to be enjoying life a lot more than their beleaguered cousins on the continent. So far this year, the manufacturer of luxury cars has delivered 5,254 cars, up from 4279 in the first half of last year, which is a 23% increase; not too shabby. Sales have been buoyed by the new Flying Spur in China, which made up more than 20% of all Bentley deliveries.
Not to be outdone by the noisy neighbours, Rolls Royce, the other luxury brand manufacturer in the UK, are reporting a 33% increase in global sales with almost 2,000 sales for the first half of the year. Sales in Europe were up almost 60% and by 40% in Asia Pacific, the company reported. The primary success was with the new Wraith model, but the company said that there were already significant orders for the Ghost II series that is yet to be released.
images: ford.com, bentleymotors.com, rolls-roycemotorcars.com