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Forbes: the global auto market will see an 80 percent decline in Europe in April

Publish Date: 2020.04.08

Analysts are forecasting an 80 per cent fall in April in Europe and a 60 per cent fall in the us.In the u.s., the LMC predicts may will be even bleaker.

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    Sales of cars and suvs in Western Europe plunged by more than 50 percent in March due to the novel coronavirus outbreak, Forbes reported. The market shrank more than in the United States, where sales fell nearly 40 percent, Forbes reported.

    Analysts are predicting an even steeper drop in April in both markets, though they remain hopeful that everything will be okay after the v-shaped recovery.In Western Europe, which includes all big markets such as Germany, the UK, France, Italy and Spain, sales are expected to fall by 80 per cent this month.By contrast, the us market is likely to fall by "only" 60 per cent.

    Sales in Western Europe fell 52.9 per cent in March from a year earlier to 774,280 vehicles, with annual sales falling 22.1 per cent to 6.6m, according to LMC Automotive.

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    The biggest contraction was in Italy, where the market fell by 85 per cent, followed by 72 per cent in France, 44 per cent in the UK and 38 per cent in Germany.Us sales fell 38.6 per cent to 983,174, slightly better than the 41.4 per cent drop in February 2009 following the financial crisis.

    Augusto Amorin, a forecaster at LMC, noted in a report that "U.S. results for April and may will be even more dismal, with light vehicle sales expected to fall to 14.2 million units for the year.

    By comparison, LMC had forecast 16.5 million in early march.In addition, the unpredictability of this unprecedented novel coronavirus outbreak means that we cannot rule out further revisions to our projections."

    Frank schwop, analyst at north deutsche bank, says the western European car market will almost come to a standstill this month.Public life will be at a standstill in Germany until at least April 19, and car sales will fall by an unprecedented more than 80 per cent, as will Europe.In addition, U.S. sales in April will fall by at least 60%.

    German chancellor Angela merkel had announced that restrictions on the free movement of people and the closure of businesses that took effect on March 22 would remain in place until at least April 19, a week after Easter.

    LMC said it had never seen such a large market decline before."This level of decline is unprecedented in a mature and stable region," said analyst Jonathan postkitt in a separate report.

    The spread of the novel coronavirus outbreak was a key factor in the decline, with widespread government lockdowns and plant closures having a profound impact on both demand and supply for the auto industry."

    But industry forecasts predict a "v-shaped" recovery in the second half of 2020.Postkitt further noted that weak sales at the start of the year were linked to early sales in December 2019, but this was dwarfed by the devastating impact of the outbreak.Once the outbreak is contained, the agency predicts a v-shaped recovery in the market, with sales picking up in the second half of 2020.

    Sales of cars and suvs in Western Europe will fall 18.3 percent in 2020 after growing 0.7 percent in 2019, LMC said.

    Mr Poskitt said the current annual forecast for 2020 was 11.7m, but if production were to continue or expand further, the market could be well below the 11.5m cars it sold in 2013 during the eurozone crisis.As factories continue to shut down, Europe's car industry is expected to renew calls for government help through cash-for-clunkers.

    But some analysts are sceptical about a "v-shaped" recovery.Inovev, a French consultancy, says that in the wake of the crisis, consumers may not make changing cars a priority.

    There are also concerns that a novel coronavirus may well re-emerge, revolutionizing the economy and working life.In addition, the initial damage caused by the shutdown could lead to protectionism, nationalization and full-scale government intervention.

    IHS Market, a forecaster, is relatively optimistic.It expects sales in western and central Europe to fall 13.6 per cent to 15.6m in 2020, but to rise 4.2 per cent in 2021, 4.3 per cent in 2022 and 1.4 per cent in 2023.

    In addition, for the United States, the worst-case scenario is 11.64 million in 2020 and 17.08 million in 2019.If the economy recovers, it will be close to 16 million by 2022.

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