Europe is the world's largest auto manufacturer, accounting for 32% of the global market. So news that European auto sales fell 8.3% last month, compared to 2007, is worrying. Italy's sales fell 20%, and were today described as 'disastrous' by CEO Sergio Marchionne, who announced that 4 of their 6 plants will shut for 3 weeks later this year. Fiat's truck plant will shut for 6 weeks, due to lack of demand. Spain was even worse, with sales down 31%. Whilst Irish sales halved.
The situation has echoes of how US auto sales began to fall away this time last year. Last August, I noted how the US majors were starting to report a fall in consumer confidence. Similarly ACEA, the European manufacturers association, is now warning of 'difficult economic circumstances' in its latest monthly report. The auto industry is a very important market for chemical sales. This new trend towards falling home market sales is therefore not good news for European chemical companies, already facing a difficult H2.