With the rising auto sales in Germany and Spain last April, there are speculations that the slump in Europe’s auto industry has bottomed out and that it may be on its way to recovery. Last Friday, we learned from national industry body data that Spanish car sales climbed by 11% while Germany registrations increased by 4% -- its first climb in the past six months.
These figures support data that indicate that the decrease in France’s auto sales slowed to 5% in April from a 16% decline in March. Last month’s auto sales in Italy decreased by 11% but the market is cautiously optimistic with the perception that its political situation has improved. According to Germany's VDIK association of car importers, the increase in April was partly due to a 5% rise in demand from private buyers and the added business day compared with March.
The VDIK said that are indications that consumer confidence is strengthening. A spokesman said that this may just be the start of an eagerly awaited stabilization. Morgan Stanley said the sales in April will assuage worries of a sustained decline in the German market that developed after a 17% drop in March. A 7% decrease in April was anticipated. In a note, Morgan Stanley analyst Stuart Pearson said that as this is the highest selling rate since last August, this will “ease fears” that that have sprouted in the market.
Morgan Stanley said that the figures for March and April in Germany are indicative of reaching a rate of 3.1 million cars annually. The debt crisis and unprecedented unemployment situation in Europe have led to the lengthiest, worst auto slump in the past several years. European automakers predict that the region's market will decrease by as much as 5% for 2013 and are looking for signs that the market will experience a recovery in the second half of 2013.