ExpertEye European Automotive Report Q2 2016 | Page 22

Portugal – High levels of NPLs a concern for banks
Whilst not as badly impacted as the likes of Greece and Italy, the
banking systems within Portugal, along with some large German

banks, reflect structural problems of excess bank capacity, high levels

of Non-Performing Loans “NPLs”, and poorly adapted business models.
However the underlying Economic Sentiment Indicator remained at a
high level with all components except industry stabilising.

Despite the positive ESI, unemployment levels remain high as does

debt levels which put household savings under pressure. In fact
Portugal’s high combined debt levels are currently the largest in the

euro zone. Nevertheless, private consumption is still expected to
provide some short-term growth.

New car sales rose 10.9% in June 2016 and are up 17.9% YTD, whilst

.
Economic Forecasts - Portugal

2014

2015

2016

2017

Inflation (%, yoy)

(0.2)

0.5

0.7

1.2

Public budget balance (% of GDP)

(7.2)

GDP growth (%, yoy)
Unemployment (%)

Gross public debt (% of GDP)

Current account balance (% of GDP)

120
115

105

250,000 p.a. as the market recovers the sales lost over 2011-12 before

100

It’s been two years since the European Commission first accused
Portugal of having a used vehicle import tax which violated the rules

on the free movement of goods and in June this year that view was

upheld by the European Union Court of Justice “EUCJ”. This import
tax has created a semi-closed market for used vehicles which has
European Automotive Report - 2016 Quarter 2

130.2
0.0

12.6

(4.4)

129.0
(0.1)

1.5

11.6

(2.7)

126.0
0.3

1.7

10.7

(2.3)

124.5
0.5

RV Index: 36 months / 90,000 kms
Average

Portugal

95
90

2010 01
2010 04
2010 07
2010 10
2011 01
2011 04
2011 07
2011 10
2012 01
2012 04
2012 07
2012 10
2013 01
2013 04
2013 07
2013 10
2014 01
2014 04
2014 07
2014 10
2015 01
2015 04
2015 07
2015 10
2016 01
2016 04

falling away again in 2019.

14.1

1.5

110

LCV sales rose 16.1% in June and putting them 16.2% up for the first

half of the year. Over the next 2 years we believe car sales could top

0.9

Sources: European Commission – Economic Forecasts Experteye AG - RV Index
Bowkett Auto Consulting Ltd - Forecast vehicle sales

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