ExpertEye European Automotive Report Q3 2016 | Page 3

Headlines . Economic Climate  Euro area GDP recovery remains slow but steady  Italian banking crisis continues with shares plummeting and €270 billion on non-performing loans  Globalisation backlash and two general elections and a referendum put the EU at risk  EU decide not to punish Spain or Portugal for breaching budget deficit rules New Vehicle Sales  New vehicle sales growth slows down with the 2007 sales record now unlikely to be beaten until 2018  Italy cancels a 2017 2 percentage point VAT rise which had been fuelling strong new vehicle sales growth  Falls in Sterling shifts new vehicle sales push from the UK into the eurozone  New vehicle sales still set to start falling during 2019 but globalisation backlash puts severe downside risk into forecast Residual Values  RVs continue to settle down as most countries are seeing them plateau  The UK already seeing a declining RV trend with other European markets soon to follow the downward cycle  Premium brands and SUVs continue to enjoy high RVs and sales  Globalisation backlash could see RVs fall sharply if further political upsets happen European Automotive Report - 2016 Quarter 3 2