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Auto Industry Cyclicality: Difference between revisions
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* It said fleet renewal programs in major markets, especially Germany, helped sales pick up in the final six months of the year following a sharp slump in the first half. | * It said fleet renewal programs in major markets, especially Germany, helped sales pick up in the final six months of the year following a sharp slump in the first half. | ||
* However, the '''payments to car buyers encouraged sales of smaller, lighter and more fuel-efficient cars''', helping Italy's Fiat Group SpA grow sales by 6.3 percent, France's Renault SA by 3.9 percent and Volkswagen AG — Europe's biggest car maker — by 0.7 percent. '''Heavier and more expensive models suffered.''' BMW's sales were down 13.6 percent and Daimler by 13 percent. | * However, the '''payments to car buyers encouraged sales of smaller, lighter and more fuel-efficient cars''', helping Italy's Fiat Group SpA grow sales by 6.3 percent, France's Renault SA by 3.9 percent and Volkswagen AG — Europe's biggest car maker — by 0.7 percent. '''Heavier and more expensive models suffered.''' BMW's sales were down 13.6 percent and Daimler by 13 percent. | ||
===== European Scrapping Schemes for Vehicles Stimulus ===== | |||
* '''The 'typical' scheme required the scrapping of a vehicle with a minimum age of 10 years, and provided an incentive of €1,500 for the purchase of a new car.''' In total, scrapping schemes have cost European governments €7.9 billion in outlay plus the cost of administration.<ref>https://circabc.europa.eu/sd/a/bcc4c732-6f54-4047-b661-42a5f3d1c490/report_scrapping_schemes_en.pdf</ref> | |||
* The €7.9 billion of funding from the 2009 scrapping schemes would theoretically support a maximum of 4.44 million units over the schedule period. Of this, 4.1 million new passenger cars were actually incentivised during the 2009 calendar year, leaving a spill-over volume of 355,000 units for 2010. Not all of this was net additional demand; '''the study methodology generates an estimated 2.16 million incremental new car sales generated during the year.''' | |||
* Vehicle assembly volumes on aggregate responded to the stimulus (in the midst of the sharpest and largest contraction in output ever witnessed) to the extent that we believe their '''response potentially forestalled, if not eventually prevented, the loss of up to 120,000 direct jobs in the industry.''' | |||
* '''In the absence of European scrapping schemes, we predict that light vehicle production would have fallen by an additional two million units to little more than 13 million units, and thus would have recorded a collapse of 26% on 2008 vehicle output'''. There have been far less bankruptcies of component and parts manufacturers than was generally expected at the depth of the crisis. | |||
* In terms of wider restructuring, they allowed a time for managed, and not enforced, rightsizing of industrial capacity. | |||
* Some of the scheme conditions observed do prejudge, to some extent, which brands, models, or powertrains may gain the most, or lose out completely. For example, we have '''shown that larger cars, premium and luxury brands, and light commercial vehicles have been only marginal beneficiaries of these schemes.''' Some of the schemes specifically limit their scrapping scheme incentives to 'private individuals'. | |||
* '''Two-thirds of the 2.16 million units of estimated additional demand generated by scrapping schemes was in the lowest price segments''' (A and B segment cars, and Utility Vans). Only 4.7% of additional customers bought SUVs, compared with 6% buying MPVs, and 20% buying compact cars (C1). The other segments combined (including medium and large cars, and premium and luxury vehicles) only benefited from 1.4% of the incremental incentivized sales. | |||
* Our aggregate calculation for 2009 is that vehicle scrapping schemes added a net 0.16–0.2% to EU-wide GDP. | |||
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