Industry Trend Analysis - Western Europe Finding A Stronger Footing For 2017 - AUG 2017

BMI View: Western Europe an vehicle sales growth will slow as demand in key markets like the UK begins to decline in 2017 but robust consumer and business confidence across other markets will keep growth in the sub-region positive. Breaking this positive forecast down, we highlight light commercial vehicles as an outperforming segment for the region.

In the latest quarterly update of our Europe autos forecast we have revised up our projected vehicle sales growth in the region for 2017 to 3.1%, up from 2.4% previously. Much of this revision has been due to our changing perspectives for Western European markets. Western Europe, which accounts for 79% of European vehicle sales, will grow just 2.0% in 2017 but we remain bullish on the prospects of most of Western Europe's largest markets such as Germany, Italy, Belgium and the Nordic region, which are benefiting from strengthening consumer confidence and rising business investment.

One of the most interesting developments has been our upgrade of Spain to make it the region's outperformer at a growth rate of 10%. Spain's vehicle sales growth prospects have improved as the passenger car market benefits from rising consumer and business confidence, a general uptick in economic activity and borrowing, as well as a booming vehicle rental sector ( see ' Short-Term Sales To Improve As Consumers Shrug Off Worries ' , June 26). We maintain, however, that this growth will remain transient over the longer run, returning to much weaker levels averaging 1.7% over the 2018-2021 period.

German, Nordic Strength But Other Key Markets Stagnating
Western Europe - 2017 Vehicle Sales Forecasts, % chg y-o-y
Source: BMI

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