Cars sales seen accelerating in 2010

German new car sales should top 2.9 million vehicles this year, the industry federation VDA said on Tuesday, though its upgraded outlook still signals a sharp drop from 2009.

Cars sales seen accelerating in 2010
Photo: DPA

The forecast fall of about 23 percent from last year stands in contrast to strong German auto exports to emerging economies such as Brazil, China and India.

Trade figures in France on Tuesday showed sales of new cars falling by 18.7 percent on a 12-month comparison, the sixth fall in six months. Data in Spain revealed a slump there of 37.6 percent on a 12-month comparison, taking overall sales down to the level of 15 years ago.

In all three countries, an important factor in the slump of 12-month comparisons was the ending of government subsidies to support the auto industry at the height of the economic crisis.

In 2009, German “cash-for-clunker” subsidies boosted domestic sales despite a sharp economic downturn, making this years’ figures weaker by comparison.

VDA president Martin Wissmann was nonetheless quoted as saying that “the German auto industry is pulling out of the crisis faster than we expected.

“We can thus raise our outlook for the domestic market,” said Wissman. Germany is Europe’s biggest, where VDA had earlier expected sales of between 2.8 and 2.9 million vehicles.

German car specialist Stefan Bratzel from the University of Applied Sciences in Bergisch Gladbach near Cologne pointed to “a much better economy than in most other countries and reduced unemployment” as key factors for the revision.

Willi Dietz from the German Institut for Automobilwirtschaft at Nuertingen University said: “The private sector is weak but businesses such as registration, rentals and so on, are very strong.”

The German economy is also Europe’s biggest, and is expected to grow by 3.4 percent this year, in large part owing to rising auto exports.

VDA forecasts an increase of 21 percent in exports this year and a gain of at least 10 percent in overall production.

For 2011, the two experts have pencilled in sales of 3.1-3.2 million cars. German sales for October were expected later on Tuesday and would likely show the 11th fall in a row, although the pace appears to be slowing from earlier in the year.

Germany, like France and Italy, is the “perfect example” of a situation whereby the economy picks up while auto sales decline, another German expert, Ferdinand Duedenhoffer said.

Another mature auto market, Japan, reported on Monday that sales of new cars had dropped by 26.7 percent in October after subsidies for environmentally friendly autos expired.

Strong exports have meanwhile given shares in leading German automakers a fillip, and those in BMW and Volkswagen are leading gainers on the Frankfurt stock exchange’s DAX index with rises of around 65 percent this year.

VW aims to overtake Toyota as the world’s leading automaker, a target both Bratzel and Dietz termed “ambitious” but possible.

Bratzel said VW had to gain a stronger market share in the United States where local factories must make sports utility vehicles that are “a bit larger without losing their VW genetic code” that provides better fuel efficiency.

Dietz pointed to India, saying that if VW is successful in the strong market where its Japanese ally is well positioned “I think they will beat Toyota.”

To stay ahead, Dietz noted that Toyota would have to strengthen its position in China, where it faces historical resistance.

“The question is can Toyota overcome the cultural barrier which is deeply rooted in the history of both nations,” he said.


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‘Tougher times’: Sweden’s economy to slow next year

Consumers in Sweden are set to crimp spending over the rest of the year, pushing the country into an economic slowdown, Sweden's official economic forecaster has warned in its latest prognosis.

'Tougher times': Sweden's economy to slow next year

A combination of record high energy prices over the winter, rising interest rates, and inflation at around 10 percent, is set to hit household spending power over the autumn and winter, leading to lower sales for businesses and dragging economic growth down to just 0.5 percent next year. This is down from the 1.2 percent the institute had forecast for 2023 in its spring forecast. 

“I don’t want to be alarmist,” Ylva Hedén Westerdahl, forecasting head at the Swedish National Institute of Economic Research, said at a press conference announcing the new forecast. “We don’t expect the sort of economic slowdown that we saw during the financial crisis or the pandemic, where unemployment rose much more. But having said that, people who don’t have a job will find it tougher to enter the labour market.” 

She said that a shortage of gas in Europe over the winter, will push electricity prices in Sweden to twice the levels seen last winter, while the core interest rate set by Sweden’s Riksbank is set to rise to two percent. 

As a result, Sweden’s unemployment rate will rise slightly to 7.8 percent next year, from 7.7 percent in 2022, which is 0.3 percentage points higher than the institute had previously forecast. 

On the plus side, Westerdahl said that she expected the Riksbank’s increases in interest rates this year and next year would succeed in getting inflation rates in Sweden under control. 

“We expect a steep decline in inflation which is going to return to below two percent by the end of 2023,” she said. “That depends on whether electricity prices fall after the winter, but even other prices are not going to rise as quickly.” 

After the press conference, Sweden’s finance minister, Mikael Damberg, said he broadly agreed with the prognosis. 

“I’ve said previously that we are on the way into tougher times, and that is what the institute confirms,” he told Sweden’s state broadcaster SVT. “There’s somewhat higher growth this year, at the same time as fairly high inflation which will hit many households and make it tougher to live.”

Damberg called on Sweden’s political parties to avoid making high-spending promises in the election campaign, warning that these risked driving up inflation. 

“What’s important in this situation is that we don’t get irresponsible when it comes to economic policy,” he said. “Because when parties make promises left, right and centre, it risks driving up inflation and interest rates even more, so Swedish households have an even tougher time. Right now, it’s important to prioritise.” 

 The call 

Sverige är på väg mot lågkonjunktur enligt Konjunkturinstitutets (KI) senaste prognos. Enligt finansminster Mikael Damberg (S) är det därför viktigt att Sverige sköter sin ekonomi ansvarsfullt och vågar prioritera.

– Jag tror att alla partier behöver vara lite återhållsamma och inte lova för mycket, säger han.

Mikael Damberg tycker att KI tecknar en realistisk bild av Sveriges ekonomiska verklighet.

– Jag har sagt tidigare att vi går mot tuffare tider och det är väl det som KI bekräftar. Något högre tillväxt i år men sämre tillväxtförutsättningar nästa år samt fortsatt ganska hög inflation som slår mot många hushåll och gör det tuffare att leva, säger han.

Och vad vill regeringen göra åt det?

– Det är viktigt att vi i det här läget inte är ansvarslösa i den ekonomiska politiken. För när partier lovar vitt och brett till allt riskerar vi att driva upp inflationen, öka räntan ytterligare och svenska hushåll får det svårare. Nu måste man våga prioritera.

Se intervjun med Damberg om konjunkturläget klippet ovan.

“Electricity prices are going to be twice as high as last winter,” said 

Elpriserna kommer att bli dubbelt så höga som förra vintern, säger Ylva Hedén Westerdahl, chef för Konjunkturinstitutets prognosavdelning, på en pressträff.
Den lågkonjunktur som KI ser framför sig kallar hon trots det för en mjuklandning. Den handlar främst om att människor kommer att ha mindre pengar att konsumera.

“Brist på gas i Europa gör att energipriserna ser ut att bli rekordhöga under vintern”, skriver KI, och ser att inflationen kommer att närma sig 10 procent.

Deras prognos för styrräntan är att den ligger på 2 procent vid årsslutet, vilket gör att inflationen faller tillbaka snabbt under nästa år och Riksbanken låter då räntan ligga still.

KI tillägger att de offentliga finanserna är fortsatt starka och de bedömer att det finns ett budgetutrymme på runt 120 miljarder kronor för de kommande fyra åren.

Vad gäller BNP spår KI en blygsam tillväxt på 0,5 procent nästa år – en nedskrivning från tidigare 1,2 procent.

Prognosen för arbetslösheten under 2023 är 7,8 procent, 0,3 procentenheter högre än tidigare prognos.

Fredrik Fahlman/TT
Johanna Ekström/TT