Automotive Dealer ; Western Europe new car market forecast 2012 ; Western Europe's new car market will suffer a bigger contraction next year than previously expected, as the region suffers a mild recession, forecaster LMC Automotive said on Tuesday.
The market research group revised its projections downward for 2012 and now expects sales to drop by almost 5.1 percent to 12.15 million vehicles in a base case scenario to account for economic output declining.
Previously it had estimated a decline of about 2 percent with sales shrinking in virtually all major markets, it said.
"Were we to see a more significant recession in Europe, the market could fall to around 11 million vehicles a year," LMC Automotive forecaster Jonathon Poskitt said.
That was roughly the selling rate in the early months after the Lehman collapse before European governments starting with Germany began introducing fleet renewal subsidies commonly called "cash for clunkers" schemes.
LMC Automotive, formerly known as J.D. Power Automotive Forecasting, reiterated its estimate that the western European car market would dip 1.4 percent in 2011 to 12.80 million vehicles versus just under 13 million last year.
Poskit said euro zone periphery car markets like Italy and Spain were obvious candidates to put downside pressure on western European sales, but economic linkages meant problems could spread to the UK despite its ability to service sovereign debt in a currency it can control.
"The UK market has been deteriorating in recent months. Consumer confidence is hitting all-time lows and the outlook for the wider economy is difficult for next year," he said.
"Along with worries about unemployment, the euro zone debt crisis is one of the factors impacting consumer sentiment in the UK. With its trading partners affected, the country will get caught up in a wider recession
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