Bad forecasts but good results
By Gasper Boncelj
(Delo, 23.1.1999)

Markets

The administrative staff of the umbrella association of European car manufacturers ACEA have figured out that in the year 1998 in the member states of the European Union together with Switzerland and Norway 14.200.000 cars were sold, that is 7 % more than in 1997. Sales figures have exceeded 14 millions threshold for the first time ever and have reached maximum after the recession year 1992. Until now the record-holding year has been 1991, when 13.500.000 cars were registered for the first time. So the market has denied official forecasts that had predicted 2 % growth in the beginning of 1998 and were corrected to 3 % in the middle of the year. Even in autumn it was rumoured about when Europe would enter financial crisis that has already hit Asia and later Russia. However, good sales figures had been persisting over the whole year and it seems that Europe was not shaken by economic difficulties that had been appearing around the world. Nevertheless, one could still doubt about the forecasts which say that in 1999 sales will only stagnate at most and even drop in worst case - for 3 % or, according to British analysis company Economist Intelligence Union - for as much as 10 % in next 3 years, since Europe reached its ten-year periodic maximum in 1997.

Let's talk now about some of the markets that had contributed most to those figures. On the biggest market - German - the sales were good, reaching 6 % growth (3.750.000 cars). It is known that their market had not suffered any artificial interventions (positive nor negative). Maybe, in last few months the sales slightly increased (10 % in December alone) as finally some new models came to market, that buyers had been waiting for quite some time.

Cofica, French analysis company, a part of Paribas group estimates that sales in Germany will remain on the same level. However, it predicts 3-% growth in France, where in 1998 the sales were increased for 13,5 % (1.940.000 vehicles) thus ending considerable drops that were caused by termination of sales stimulation years ago.

For Italy predictions of Cofica are more pessimistic - sales are estimated to drop for 15- to 30-% in 1999. On this most important Mediterranean market the sales dropped for 1,6 % to 2.360.000 cars in 1998, what is really not surprising taking into account the fact that in 1997 maximum of 2.400.000 vehicles was reached, heavily supported by governmental programme that ended in mid 1998. In autumn monthly sales rates dropped, nonetheless it is interesting that CSP, Italian research centre evaluated overall 1998 sales as satisfactory. According to their market research in January about 50 % of domestic car dealers were not satisfied with orders (81 % in September). Such considerations are somewhat contradictory to pessimism arising elsewhere.

In contrast with the above the estimates for Great Britain agree that the sales will drop, although in 1998 they augmented by 3,5 % to 2.500.000 cars. Economic growth on the island is becoming steady (among the first ones) - as their economic cycle is ahead of that one of the rest of Europe.

Some are still convinced that the last of big European markets, namely Spain, should be very active. In 1998, sales were increased by 17 % to 1.190.000 cars, thanks to subventions offered to the buyers replacing their 10-year old cars or older, similar to Italy.

Manufacturers

Among manufacturers Volkswagen group has straighten its top positions by increasing its market share from 17,1 % to 18 % which is their best share ever (former record was 17,5 % in 1992). Inside the trust progress of different brands varied: Volkswagen itself got 11 % share (1.570.000 vehicles, Golf being the overall best-seller), Audi and Seat remained at 3,4- and 2,5-% market share.

Skoda slightly increased its share to 1,1 % but their sales figures jumped highest (+37 %).

Second place holds General Motors (as in 1998, too). It was slightly disappointed by losing 0,6 % of the market (reaching 11,5 %), mostly with Opel, while Saab (GM owning it half) has slightly increased sales.

PSA group replaced Fiat on the third place keeping his market share almost unchanged - at 11,4 % in two consecutive years, 1997 and 1998, keeping both brands, Peugeot and Citroen.

For Fiat year 1998 was not too good, they have fallen from the third to fourth place (from 11,9 % to 10,9 %). Inside the group Fiat and Lancia lessened their market shares while exceptionally successful was Alfa Romeo that increased sales for 37 %.

French Renault advanced from the sixth place to the fifth increasing his share on the market by 0,8 % to 10,7%. With 1.540.000 sold cars Renault is only a bit behind Volkswagen brand and Renault Mégane (mostly due to success of its model Scenic) is second best to Golf.

Ford has fallen from the fourth place to sixth and decreased its share by 1,1 % to 10,2 % affected by the change of models (similar as Opel).

BMW on the 7^th place lost 0,4 % - from 6,1 % to 5,7 %, but mostly because of Rover and not BMW itself.

Mercedes Benz (a part of Daimler-Crysler) on the 8^th has increased its sales for 28 % reaching 4,4 %, which is for now its best share.

Volvo, European smallest independent manufacturer, that attract many suitors, keeps its 1,7 % share.

The Japanese as a whole made a slight improvement - from 11,6 % to 11,8 %.

The Koreans are constantly increasing their market share for past several years. Their sales have increased for 33 % in 1998 but their market share increased only from 2,2 % to 2,7 %.