Consumer Belt-Tightening Will Limit Growth

New vehicle sales in Germany have posted a better-than-expected recovery in Q111, with passenger cars and commercial vehicle sales rising 14% year-on-year (y-o-y), to 763,600 units, and 30.9% y-o-y, to 76,426 units, respectively, according to the German autos association VDA. BMI believes that this growth is led by strong consumer demand and improved business confidence. We are, however, cautious that concerns of rising inflation and oil prices will dampen some optimism in H211, making Q111 trends highly unlikely during the rest of the year. As such, we have slightly revised up our vehicle sales forecast to a rise of 8%

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