Automakers from Daimler’s Mercedes-Benz to Ford are cutting their forecasts for the region as the western markets show signs of slowing growth and Russia heads towards a sales disaster.
Daimler for instance decided to trim its expectations for the global car market due to slumping demand in emerging markets, Russia’s delivery plunge and the shaky results in other European countries. Chief executive Dieter Zetsche now predicts 2014 worldwide sales would grow 3 to 4%, down from a previous prediction of 4 to 5%.
“Perhaps we will arrive at 13 million or 13.5 million (overall vehicle sales in Europe). But the market won’t return to (the pre-crisis level of) 15.5 million, I’m sure of it,” added Martin Winterkorn, the CEO of Volkswagen.
“Earlier this year, momentum was at the upper end of expectations but it’s flattening out a bit,” added Ford Europe Chief Executive Stephen Odell.
The overall European market has returned to a subtle growth in 2014, but the reality is that the base is at a two-decade low. Also, many countries offering government subsides and widespread incentive wars across the region make it even harder to quantify the real strength of the car market. The Russian situation is especially dire, because of a declining local currency and the Ukraine political tensions, but many officials expect the market to recover sooner, rather than later.