EU automotive production is forecast to fall by -1.4% on-year in 2019 and to rise by 2.2% in 2020, according to European steelmakers association Eurofer.
EU car registrations fell -3.1% on-year in the first half of 2019. Commercial vehicle registrations, however, rose 6.5%, with Germany recording almost 15% growth. Vehicle exports to third countries remained under severe pressure due to weakening demand in key global markets.
EU automotive production fell -5.1% on-year in the first quarter. This was due to reduced domestic sales, model changes and strong base effects from stock building prior to the implementation of new procedures for emission testing (WLTP), Eurofer observes.
Strong replacement demand in recent years and uncertainty about the impact on car ownership cost of switching to electric vehicles are expected to dampen new car sales in 2019.
“Sluggish car demand from key markets such as the US, China and Turkey will continue to dampen exports; rising domestic production in emerging markets is another headwind for EU car manufacturers,” Eurofer says in a report seen by Kallanish. Some relief is, however, provided by the commercial vehicle market segment owing to companies investing in a greener transport fleet.
“In 2020, the WLTP distortions fading out combined with a mild pick-up in car demand and the introduction of new (electric) models by most European car producers should lead to car sales resuming a positive trend,” Eurofer explains.
Besides these demand factors, “…major intra-European production shifts are to be expected as OEMs increasingly put their stakes on the shift towards electric powertrains, motivated by rising demand, government policies and new entrants into the market,” the association adds.
Various car manufacturers have already said their entire passenger car range will be electrified within a decade to a significant degree. This implies that they will have to curtail excess capacity to free up funds for further investment in alternative powertrains solutions, Eurofer concludes.