CB Analysis – how Europe has it far worse than Singapore
Cheer up, car dealers. The latest sales numbers show that things are even more gloomy for your counterparts in Europe
By Leow Ju-Len
WIDESPREAD ECONOMIC GLOOM may have caused a palpable slowdown in showroom traffic, but Singapore car dealers should still count themselves blessed.
Things are far worse in Europe.
The latest figures from Jato, an automotive consultancy, showed that November sales there are off a massive 25.3 percent compared to a year ago.
The 27 countries included in Jato’s numbers collectively sold 924,936 cars last month, versus 1,238,297 in November 2007.
So far, while fresh orders for new cars here have undoubtedly slowed down, the Singapore car industry not seen such a dramatic fall in registration numbers.
With the overall volume of sales here determined by the number of COEs (or Certificates Of Entitlement) available, the number of cars put on the road is still capped and artificially small, and gloomy economy notwithstanding, registrations have continued to fill the COE supply.
It’s likely that if the Quota System were abolished today, car sales would see a massive jump here. The $2 COE for cars up to 1.6 litres in late November stirred buyers into action by the thousand, showing that the market here is more asleep than dead.
Contrast that with the fate of major markets like Great Britain, for instance. Sales are down there by 36.8 percent compared to last November.
Places like Denmark and Spain have seen their car sales cut in half, and even mighty Germany, which has the largest car market in Europe, sold 17.7 percent fewer cars last month than in November 2007.
And spare a thought for car dealers in Iceland, which nearly went bankrupt as a country when the financial crisis hit.
In November last year a respectable 1,365 were sold on the island nation of 320,000 people, but last month sales collapsed to an eye-watering 74 units.
News like that brought comfort to at least one sales manager we spoke to from a distributorship for a French marque.
“I would agree we are still better off here, even though every dealer has been negatively affected. If you ask me, people (in Singapore) still have cash – it’s a matter of whether they want to come out with it,” he says.
“It’s more psychological here, whereas in other places people are probably really broke.”
How are things at home?
EUROPE’S CARMAKERS ARE struggling, along with those of Japan and the United States.
Although niche carmakers like Porsche and Ferrari have said that 2008 will be their best year ever in terms of sales volume and profits, in the mainstream world things are very different.
Production is being cut, profits are evaporating, and some firms literally have no idea how they will fare in the coming months. BMW, for example, has given up providing investors with profit projections for the time being.
The Europeans continue to rule their home markets, though, with Continental brands occupying all slots in a top 10 ranking of sales.
But last month was a terrible one. For the first 11 months of the year the overall European market is down 7.1 percent, but November sales have shrunk 25.3 percent compared to a year ago.
Nevertheless, the top five manufacturers have been resilient. From their rank, only Opel’s November sales have fallen more than average, skidding 37.1 percent.
Some carmakers are weathering the storm fairly well, too.
Audi’s November sales shrank just 1.1 percent, allowing it to outsell Mercedes-Benz (down 22.2 percent) and BMW (down 28.5 percent) last month. It’s worth noting, however, that for the whole of 2008 the finishing order is still likely to be Mercedes, BMW, Audi in Europe.
Other makers with reason for cautious celebration: Nissan, Mazda, Subaru and Jaguar. For 2008, their European sales are likely to be higher than last year’s.
