Expecting new-car sales to get better in 2011? Think again

Luca Ciferri is a reporter for Automotive News
Market watchers like us expected western European new-car sales to start to decline in April and that is what happened. April sales slid 5 percent to 1.14 million units, according to data from J.D. Power Automotive Forecasting.

Unfortunately, there is more bad news.

J.D. Power now expects western Europe’s new-car sales to be static at 12.5 million in 2011. (One glimmer of optimism worth noting is that the analyst slightly tweaked upward its prediction for western Europe’s full-year sales. It sees 2010 volumes down 8.1 percent to 12.54 million units, which is better than the 8.9 percent drop to 12.43 million unit that it forecasted for the full year last month.)

Many thought the new-car sales trough had been reached and expected western Europe’s sales recovery to start next year. Due to problems such as Greece’s financial collapse, there are fears that consumer confidence will weaken, therefore J.D. Power does not see a true recovery for the region's new-car sales starting until the second half of 2011.

That means Europe will remain a very tough battleground for at least another 19 months.