Europe: auto executives cautious about regional prospects on Russian woes image

Europe’s automakers have started seeing a robust demand growth in the region after a six-year slump that yielded two-decade low sales ended last year.

Auto executives say passenger cars sales have soared in most regions, though their prospects for the year continue to be clouded by the deeply troubled Russian market. “We had to take out shifts in our St. Petersburg factory and we will even close it … starting in March and into May,” commented Opel CEO Karl-Thomas Neumann. He says the market, once the third-biggest in the region for General Motors, has seen massive sales drops. Opel and Chevrolet have both seen demand slumping as the country falls deeper into recession, brought by its Ukraine political troubles, western sanctions and slumping local currency. The executive said the situation for the entire European region would remain unchanged this year and the next – with markets growing and others “hugely disappointing, foremost obviously the Russian market.”

Data from industry forecasting group IHS Automotive showed the Russian car market slumped 24 percent in January, to 115,390 units. Total deliveries for the year are expected by the researcher and numerous auto industry executives to drop close to 30 percent to a range between 1.7 million and 1.9 million after already slumping 10 percent in 2014 to 2.5 million vehicles. Many top officials said they were optimistic about prospects in the western part of Europe, but the Russian situation was casting a shadow of doubt on any sound forecast for the year. Numerous automakers lifted prices in the country, stopped producing inefficient models and even halted sales of some nameplates.

Via Automotive News Europe