Euro area car registrations: Mild growth expected in November; prospects for next year very weak

With four main euro area countries having released their new car registrations data for November, we estimate that they could rise mildly between 0-0.5% m/m in the euro area, after the -2.5% m/m and +0.3% m/m in the past two months (seen in the official Eurostat series).

Assuming a flat reading in December, the euro area new car registrations would then be down 0.6% q/q in Q4 after +2.3% q/q, according to our aggregated series. For 2011 as a whole, they would be slightly down by 0.8%, somewhat recovering from -8.7% seen in 2010. According to our growth baseline scenario, which argues for an overall GDP contraction to the tune of 0.2% on average in 2012, prospects for the sector are very weak, and if anything tilted to the downside. We project the unemployment rate rising from 10.1% in Q3 11 to 11.1% in Q4 12. In any case, the outlook will greatly depend on the time it will take for European and international leaders to break the negative loop of confidence.

At the country level, we find that Germany and France should experience a positive Q4 print, while the car market in Italy and Spain should deteriorate further in the final three months of the year. Finally, Germany should be the only country to see its car registrations actually rise in 2011.

source: BarCap