ExpertEye European Automotive Report Q1 2017 | Page 19

Whilst net exports have been a key feature of the German economy the increase in domestic
demand has pushed up imports and this is expected to continue over the next couple of years and
should the UK go for a hard Brexit this is only going to increase the rate of decline in Germany’s
trade surplus.
New car sales growth has remained relatively stable over the last three years rising 2.9% in 2014,
5.6% in 2015 and 4.5% last year. Despite both February (-2.6%) and April (-8%) showing a decline in
new car sales 2017 still looks likely to see new car sales growth. The pressure to continue doing
domestic tactical registrations will continue as the weak exchange rate adds pressure on the
German car manufacturer’s critical UK market. This means we are likely to see a year of volatile
monthly sales but we still expect 2017 to end 2.3% higher than 2016. Light Commercial Vehicles
“LCVs” sales should continue to build on the 8.9% Q1 growth rate thanks to the increase in
construction, equipment and machinery and government infrastructure. BY the end of 2017 we
currently expect LCV sales grow by 15%-20%.
RVs and used car values “UCVs” continue to remain stable overall but this partly masks the growing
divide between petrol and diesel with gains in the former hiding weakening in the latter. Executive
vehicles have seen RVs increase marginally pushing it ahead of Luxury SUVs but some of this is down
to increased volumes in the SUV segments.
Whilst the election later in the year is expected to see an increase in the right-wing populist vote
it is unlikely to result in a Trump style upset, meanin g it will be business as usual heading into
2018. Since Germany has generally always remained far more stable than most major European car
markets we still think any rise in RVs is likely to be limited to 1-2 percentage points over the next
12 to 18 months at best.
European Automotive Report - 2017 Quarter 1
18