Autos are now the single biggest market for petchem sales. They are also reported very quickly. So October’s EU auto sales provide the best real-time picture of the downturn now underway. As the chart shows:
• October’s sales (red square) were the lowest in recent years
• Total sales since January are also the lowest
• They are 16% below the 2007 peak
It is not difficult to write the script from here. People in the weaker economies such as Spain or Italy will not be buying many new cars in the next few months. Austerity programmes and rising unemployment do not encourage purchases of high cost items.
Equally, as Petromatrix report, consumers are cutting back on their driving, as they worry about high fuel costs. Germany’s diesel demand was down 6% in September versus 2010, whilst gasoline demand was down 3%. Data for the other 4 main markets (France, UK, Italy, Spain) shows similar trends.
Already the auto makers are starting to respond. GM said its results were “not sustainable and not acceptable”, adding that it was looking at ways to reduce costs. Others such as Peugeot have already announced production cuts and layoffs.
Q1 could be very difficult indeed, if current trends continue.