European auto industry shuts down

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Several European chemical companies have been undertaking surveys of likely near-term demand from the auto sector, and have been kind enough to share their conclusions with the blog.

The results are not encouraging. It appears that every European car producer has announced plans for an extended Christmas shutdown of at least 2 weeks, compared to the usual 1 week. Some will shut for up to a month.

The issue is that European car sales are now starting to collapse, as they did 6 months ago in the US. As recently as July, when US sales were already down c22%, European sales were “only” down 7% versus 2007. But now JD Power say European sales were down 25% in November, a clear sign that a major downturn is underway. And as the blog first noted back in February, this also means increased credit risk for chemical suppliers with OEMs in the auto market.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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