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Western Europe’s Auto Doldrums Could Last Until 2019

Posted: June 20, 2013 at 3:02 am

The car market in western Europe is likely to shrink in 2013, marking its sixth straight year of falling sales, according to a new global auto study by consulting firm AlixPartners LLC. The report expects sales to bottom out at about 12 million vehicles in 2014.

Unfortunately for automakers, AlixPartners predicts that registrations will plateau for at least five years near that low point—far from the region’s sales peak of 16.8 million vehicles in 2008. But the firm notes that after years of bruising declines, including last year’s 8% drop to 11.77 million units, simply not losing ground may feel like good news.

“Flat is the new up,“ says Hoffecker, head of AlixPartner’s automotive practice. He says central and eastern Europe will offset some of western Europe’s stagnation as they boost deliveries by about 2 million vehicles over the next five years.

The slowdown is taking an increasing toll on western Europe’s car plants. This year, the study says, 58% of the region’s top 100 factories are operating at less than three-quarters of capacity, which is considered the breakeven point.