Moody’s puts forecasts for car sales into sharp reverse

By DOMINIC JEFF
Published on 18/09/2012 00:00

RATINGS agency Moody’s had put its forecasts for global car sales into reverse as the eurozone crisis and weakening Chinese growth weigh on the industry.

The report from Moody’s, which predicts western European car sales will continue to slump this year and next, comes as Jaguar Land Rover (JLR) reported that rampant demand seen earlier in the summer was cooling.

JLR sales were still up 13 per cent year-on-year in August, compared to a 41 per cent jump in July. Indian parent company Tata Motors saw global vehicle sales rise by the same proportion, with customers driving away 97,225 vehicles last month.

Tata Motors’ luxury British arm JLR created 1,000 jobs with the introduction of an extra shift at its Merseyside plant a month ago, as it ramped up production to meet growing demand from emerging markets.

Yesterday Moody’s said premium marques such as JLR, Aston Martin and BMW could look forward to stronger demand than the broader market, especially as they were less dependent on sales to hard-pressed European consumers.

The agency said the weak consumer confidence and non-existent economic growth in Italy and Spain were putting the brakes on European car sales. It said it now expects “light vehicle” sales in Europe to fall by 8 per cent this year, worse than its previous forecast of a 6.2 per cent slump.

Moody’s added: “In 2013, we expect western European light vehicle demand to contract again for what will be the sixth consecutive year. We forecast demand to be down 3 per cent on 2012 compared with our [previous] forecast of 3 per cent growth, which was based on a mild economic recovery boosting demand.”

Demand in Italy was expected to be 20 per cent lower this year, while Spanish drivers are seen buying 11 per cent fewer vehicles.