Western Europe’s new car market in 2012 is expected to shrink more than previously expected, as the region is experiencing a mild recession, LMC Automotive announced in a forecast.
The market research group revised its projections downward for 2012 and expects sales to drop by almost 5.1 percent to 12.15 million vehicles in Western Europe. LMC Automotive previously estimated a decline of about 2 percent, with sales decreasing in all major Western European markets. “Were we to see a more significant recession in Europe, the market could fall to around 11 million vehicles a year,” LMC Automotive forecaster Jonathon Poskitt was quoted as saying by Reuters.
That is similar to the market size in the first months following the Lehman collapse and before European governments began offering subsidies for new car acquisitions. For the current year, LMC Automotive estimates that the Western European car market will drop 1.4 percent to 12.80 million vehicles, down from just under 13 million in 2010.
The markets most likely to suffer big drops in car sales are Italy and Spain, but problems could also spread to the United Kingdom, despite the latter is not part of the euro zone. “The UK market has been deteriorating in recent months. Consumer confidence is hitting all-time lows and the outlook for the wider economy is difficult for next year,” Poskitt said.