Europe Has Tea Parties, Too. They’ve Just Learned To Compromise
“The worst is behind us. The decline in sales has considerably slowed and we are now witnessing signs of recovery in demand,” said Peter Fuss, senior advisory partner at the Global Automotive Centre of accountants EY (formerly Ernst & Young). “The sales, however, continue to be artificially boosted by huge discounts and self-registrations by dealers,” Fuss added, referring to cars still held in showrooms. He warned it would take at least two years before the market was strong enough to grow on its own without the aid of incentives. BETTER GAUGE In a sign of recovery in the ailing euro zone periphery, car demand in Greece, Ireland and Portugal jumped by double-digit rates, albeit from depressed levels. For the first nine months of the year as a whole, ACEA said registrations in Europe still fell 4 percent from the year before to 9.33 million, on the back of weak demand in Germany, Italy and France – and in the Netherlands, where sales have plummeted 29 percent year-to-date. September volumes may be a better gauge of underlying trends than August, since the latter’s results are artificially depressed given many European car buyers are on holiday. It is also a crucial month for the UK market, since it accounts for about 18 percent of annual volumes. The UK increase was the sixth straight double-digit monthly rise. Among manufacturers, the biggest winner in September was Renault (RENA.PA), which increased sales 17 percent at its flagship brand, while its low-cost Romanian badge Dacia saw volumes leap by 40 percent. Germany’s Daimler (DAIGn.DE) also posted a strong month with sales of its Mercedes-Benz brand increasing nearly 14 percent after the French government was forced to end its sales ban on certain vehicles. Volvo (part of China’s Geely Holding Group GEELY.UL) reported a surprisingly strong gain of 13 percent to help its otherwise weak performance so far this year, while brands heavily dependent on the dismal Italian market such as Fiat’s (FIA.MI) Lancia and Alfa Romeo continued to see volumes fall at a double-digit rate.
Without them, Newmark adds, the Tories still have been able to pass austerity budgets. In the U.S., members of the House and Senate allied with the Tea Party have the support of some percentage of voters for their unyielding stance on fiscal policy. But because they hold power as Republicans, rather than in a coalition alongside the GOP, its hard to tell how many Americans believe they were right to shut down the government and threaten default. America has never done more than flirt with the idea of a third party. Those that gained a modicum of recent support rose up around the appeal of a single person, such as Ross Perot or Ralph Nader. Like new parties in Europe, the Tea Party seized on an issuepublic debtthat both major parties had agreed to ignore. Its shown staying power that eluded other attempts to form lasting third parties. Yet the true test of its strength and legitimacy will come only if it leaves or is ejected from the Republican Party that now uncomfortably hosts it. Running candidates for office under its own banner would reveal the depth of its popularity. And it would force the party to decide whether it wants to make laws or throw rocks. Theres at least one person whos been inspired by the current, crippled Washington: Benedetto Zacchiroli, a city councilor in Bologna, Italy. Both President Obama and the Republicans are to be admired, he says, for holding firm to their ideals. He sees in their fight something rare in Italian politicsa battle not over positions and privileges but ideas and policies.
Europe’s Car Sales Rally, Thanks To Discounts, Dealer Action
These will eventually be sold on to the public at well below sticker price. The Brussels-based European Car Manufacturers Association, known by its acronym in French, ACEA, ( www.acea.be ) announced today that Western European car sales were up 5.4 per cent in September compared with the same month last year at just over 1.1 million, bringing the total for the year so far to 8.8 million. Thats a fall of 4.0 per cent on the first nine months of last year. Peter Fuss, partner at consultants Ernst & Young Ernst & Young s Global Automotive Center in Frankfurt, Germany, said the recovery in car sales was down to the improvement in Europes economic outlook, with the Euro currency zone pulling out of recession during the second half of 2013. But with factory use down to less than 65 per cent by manufacturers, according to Fuss, this underlines the chronic overcapacity in Europe, which remains unresolved because of pressure from unions and governments to resist rationalisation. The European industry is looking for a bailout along the lines of the U.S. intervention on behalf of bankrupt GM and Chrysler, to allow it to finally shut-down uneconomic factories. But given the financial crisis in the euro zone, this is simply unaffordable. Ernst & Young expects an overall decline of three per cent in Western Europe for the whole year, and only modest growth next year. This growth will continue to be artificial one that is driven by discounts and self-registrations. We estimate it will take at least two years for the market to witness the real sales recovery, driven by replacement demand. As a result, profits for automakers are likely to remain challenged at least until 2014 is out, Fuss said. According to ACEA, Volkswagen of Germany remains the market leader with just under 25 per cent of the market. VW is still strongly profitable, and has brands like Audi Audi , SEAT, Skoda, Lamborghini and Bentley in its stable. In second place is PSA Peugeot Peugeot -Citroen of France at just over 11 per cent, followed by GM Europes Opel, Vauxhall and Chevrolet brands, Renault Renault of France, Ford Europe and Fiat of Italy.