Saint-Gobain S.A. CEO Pierre-Andre de Chalendar said the company will record a drop in first-half earnings mostly because the European car sales are in the red area, and the construction markets struggle to recover in southern Europe.
The executive predicts western European car sales will continue to drop in 2012, while other industrial markets should keep a “decent level of activity,”.
“After a first quarter that was somewhat decent, signs in recent weeks aren’t very positive” for the economy, de Chalendar said.
European auto makers association ACEA said Wednesday the European market outlook for 2012 has deteriorated, adding to signs that economic uncertainty and tough austerity measures in several countries continue to hurt demand for new vehicles in the region.
“The outlook for the European vehicle market in 2012 has further worsened due to the challenging economic situation in many of the [European Union] member states,” ACEA said in a statement.
In addition, Competitive Automotive Regulatory System for the 21st Century forecasts that the European automotive market will shrink for a fifth consecutive year in 2012, Frankfurter Allgemeine Zeitung reported citing a Cars 21 strategy paper.
According to the report, some 12.4 million cars are likely to be sold in Europe this year — 3 million fewer than in 2007, the newspaper said.