ExpertEye European Automotive Report Q1 2017 | Page 28

Outlook
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Economic Climate
Whilst the election results in the Netherlands and France may be seen as the end of the far right populist uprising 2017 may still have some
surprises in store. The far right are unlikely to secure control in any member states this year but the UK election is just weeks away and it is
likely to see the main left wing party, Labour, facing a collapse in votes. There is also the German election in late autumn and an Italian
election which could be held anytime between now and early 2018. However, the Italian electoral system means a coalition government is
likely to be the result and Germany is set to follow a similar pattern to the French and the Dutch
election results with an increase in the far right’s vote but not enough to gain power.
The ongoing banking crisis in Italy and Greece together with high budget deficits continues to
put significant downside risk into the sustainability of the European recovery. Based on the
Banking crisis continues with a third
of Italian banks at risk
Temporary contracts driving down
youth unemployment but driving up
resentment
Texas ratio Italy could see a third of its banks fail. The growth in temporary and zero-hour
contracts particularly targeted at the younger generations, who are still facing unemployment levels in some countries above 40%, is adding
to the political unrest and resentment in younger voters in many countries. Whilst 2017 has failed to see the political upsets of 2016 unless
significant economic changes are made in this area the next round of major European elections around 2021 could see a renewed rise in
backlash voting.
New Vehicle Sales
The war on diesel is sending out confusing messages to car buyers. Instead of encouraging the take up of clean Euro 5 and Euro 6 diesels the
spin and messages coming from politicians and the media is damaging the entire diesel market. Even well regarded broadsheet newspapers
are referring to the sale of diesel vehicles on PCP as being mis-sold and leaving buyers with negative equity even though the structure of PCP
deals, also known as balloon finance, actually enables car buyers to just hand the car back at the end of the contract if it is worth less than
the balloon amount.
European Automotive Report - 2017 Quarter 1
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