Diversification To Rescue Carmakers From European Slowdown

Passenger car production in Germany reached a record 5.87mn units in 2010 (according to estimates from the German autos association VDA), remaining only slightly shy of BMI's expectation of 6.5% year-on-year (y-o-y) growth during the year. As expected, much of this growth came on the back of solid demand for exports, which grew 7% y-o-y, to 4.5mn units. In 2012, however, we are cautious about any significant growth in German vehicle exports and production in view of the economic headwinds in the eurozone, and accordingly forecast growth of 2.8% y-o-y and 2.4% y-o-y respectively during the year.

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