Eurozone Weakness Threatens Regional Outperformer

The effects of the economic slowdown are beginning to be felt in the German automotive market with ten-month cumulative vehicle sales growth slowing for both the passenger car and commercial vehicle segments. We expect both consumer and business sentiments to take a hit from the state of the global economy, further tightening of Germany's labour market and Germany's involvement in any future bailout measures. In line with this view, we maintain our end of year forecast for total sales growth of 8.3% y-o-y to 3.46mn units in 2011, which we expect to be followed by a moderate 3.8% growth to 3.59 units in 2012.

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