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European Car Sales Rebound Falters, Outlook Remains Muted
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The auto market in Europe is in murky waters. Production and sales of vehicles in Europe had already taken a hit amid economic slowdown, challenges associated with electric vehicle rollout and detrimental effects of the U.S.-Sino trade tiff. The coronavirus outbreak further compounded the woes. European car registrations fell from January to August 2020 amid the pandemic-led sluggish demand, followed by a surprising one-month reprieve in September. However, the rebound failed to sustain amid another wave of coronavirus. Sales for October regressed as a result of reimposition of restrictions in many countries amid rising coronavirus cases.
Digging Into October Sales Report
Per European Automobile Manufacturers Association, passenger car sales in Europe again slipped into the negative territory in October, reversing the first increase this year in September. Registration of new cars in the European Union (EU) totaled 953,615 units in October, down 7.8% year over year.
Demand of vehicles declined across all the four major markets in Europe last month. While car sales plummeted 21% year over year in Spain, France witnessed a drop of 9.5% in new passenger car registrations. Sales in Germany and Italy slid 3.6% and 0.2%, respectively, on a year-over-year basis. In fact, sales declined across all EU markets expect Romania and Ireland.
Sales from German auto giant Volkswagen (VWAGY - Free Report) declined 9.1% year over year for the month under review. While luxury brands including Audi, Bentley, Lamborghini and Bugatti saw a spike in sales, mass brands were badly hit. Volkswagen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sales of BMW AG (BAMXF - Free Report) and Daimler AG contracted 13.5% and 8.1%, respectively. Vehicle registrations of PSA Group, one of the leading car manufacturers in Europe, dipped 6.6% from a year ago. The Italian-American carmaker Fiat Chrysler was an outlier, with sales increasing 3.9% year over year. Auto sales from France-based Renault S.A. (RNLSY - Free Report) remained almost flat with a year ago at 112,021 units.
Passenger car registrations in EU by Japan-based automakers including Toyota (TM - Free Report) , Honda, Nissan and Mazda were down 8%, 6.2%, 14.2% and 38%, respectively. Sales of South Korea-based Hyundai and U.S. auto giant Ford (F - Free Report) also slipped 7% and 20.8%, respectively, for the month.
Passenger car registrations in EU during the ten months ended October 2020 dipped around 27% year over year to 8 million units. This marked the worst decline, outpacing the slump during the 2009 financial crisis. Among the four major EU markets, Spain saw the biggest decline of 36.8% during the January-October 2020 period, followed by Italy, France and Germany, which witnessed sales slump of 30.9%, 26.9%, and 23.4%, respectively.
Dim Near-Term Prospects
Toward the end of October, U.K. prime minister Boris Johnson announced a four-week lockdown, mandating all non-essential shops including auto dealerships to remain closed. Amid the sweeping number of coronavirus cases, Germany is bracing for an extension of lockdown into December. France is also currently in lockdown mode, albeit with less severe restrictions than the previous lockdown.
The near-term auto sales outlook appears quite uncertain amid the fresh wave of coronavirus and grim economy forecasts. The European Commission expects the second wave of the virus to shrink the economy by 7.4% within year-end. Moreover, GDP contraction forecasts across Europe are quite uneven. European Commission expects GDP of Germany, Spain and the United Kingdom to contract 5.6%, 12.4% and 10.3%, respectively, in 2020.
The second round of lockdown, which has resulted in the closure of many car dealerships, has hampered the recovery of auto sales and prompted LMC Automotive to downwardly revise the full-year auto sales forecast in Europe. LMC forecasts 2020 sales in Europe to decline 22% year over year to 16.2 million vehicles. IHS Markit anticipates 2020 sales in Western Europe sales to drop 24% year over year to 12.5 million units. The sales decline will make it an uphill task for the industry to generate the funds needed for the technological change to tackle climate crisis.
Nonetheless, amid reports on vaccine optimism, sales in 2021 are expected to recover. LMC expects 2021 auto sales in Europe to increase 15% year over year to 18.7 million. IHS Markit also expects Western Europe sales in 2021 to rise 12% year over year to 14 million units.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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European Car Sales Rebound Falters, Outlook Remains Muted
The auto market in Europe is in murky waters. Production and sales of vehicles in Europe had already taken a hit amid economic slowdown, challenges associated with electric vehicle rollout and detrimental effects of the U.S.-Sino trade tiff. The coronavirus outbreak further compounded the woes. European car registrations fell from January to August 2020 amid the pandemic-led sluggish demand, followed by a surprising one-month reprieve in September. However, the rebound failed to sustain amid another wave of coronavirus. Sales for October regressed as a result of reimposition of restrictions in many countries amid rising coronavirus cases.
Digging Into October Sales Report
Per European Automobile Manufacturers Association, passenger car sales in Europe again slipped into the negative territory in October, reversing the first increase this year in September. Registration of new cars in the European Union (EU) totaled 953,615 units in October, down 7.8% year over year.
Demand of vehicles declined across all the four major markets in Europe last month. While car sales plummeted 21% year over year in Spain, France witnessed a drop of 9.5% in new passenger car registrations. Sales in Germany and Italy slid 3.6% and 0.2%, respectively, on a year-over-year basis. In fact, sales declined across all EU markets expect Romania and Ireland.
Sales from German auto giant Volkswagen (VWAGY - Free Report) declined 9.1% year over year for the month under review. While luxury brands including Audi, Bentley, Lamborghini and Bugatti saw a spike in sales, mass brands were badly hit. Volkswagen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sales of BMW AG (BAMXF - Free Report) and Daimler AG contracted 13.5% and 8.1%, respectively. Vehicle registrations of PSA Group, one of the leading car manufacturers in Europe, dipped 6.6% from a year ago. The Italian-American carmaker Fiat Chrysler was an outlier, with sales increasing 3.9% year over year. Auto sales from France-based Renault S.A. (RNLSY - Free Report) remained almost flat with a year ago at 112,021 units.
Passenger car registrations in EU by Japan-based automakers including Toyota (TM - Free Report) , Honda, Nissan and Mazda were down 8%, 6.2%, 14.2% and 38%, respectively. Sales of South Korea-based Hyundai and U.S. auto giant Ford (F - Free Report) also slipped 7% and 20.8%, respectively, for the month.
Passenger car registrations in EU during the ten months ended October 2020 dipped around 27% year over year to 8 million units. This marked the worst decline, outpacing the slump during the 2009 financial crisis. Among the four major EU markets, Spain saw the biggest decline of 36.8% during the January-October 2020 period, followed by Italy, France and Germany, which witnessed sales slump of 30.9%, 26.9%, and 23.4%, respectively.
Dim Near-Term Prospects
Toward the end of October, U.K. prime minister Boris Johnson announced a four-week lockdown, mandating all non-essential shops including auto dealerships to remain closed. Amid the sweeping number of coronavirus cases, Germany is bracing for an extension of lockdown into December. France is also currently in lockdown mode, albeit with less severe restrictions than the previous lockdown.
The near-term auto sales outlook appears quite uncertain amid the fresh wave of coronavirus and grim economy forecasts. The European Commission expects the second wave of the virus to shrink the economy by 7.4% within year-end. Moreover, GDP contraction forecasts across Europe are quite uneven. European Commission expects GDP of Germany, Spain and the United Kingdom to contract 5.6%, 12.4% and 10.3%, respectively, in 2020.
The second round of lockdown, which has resulted in the closure of many car dealerships, has hampered the recovery of auto sales and prompted LMC Automotive to downwardly revise the full-year auto sales forecast in Europe. LMC forecasts 2020 sales in Europe to decline 22% year over year to 16.2 million vehicles. IHS Markit anticipates 2020 sales in Western Europe sales to drop 24% year over year to 12.5 million units. The sales decline will make it an uphill task for the industry to generate the funds needed for the technological change to tackle climate crisis.
Nonetheless, amid reports on vaccine optimism, sales in 2021 are expected to recover. LMC expects 2021 auto sales in Europe to increase 15% year over year to 18.7 million. IHS Markit also expects Western Europe sales in 2021 to rise 12% year over year to 14 million units.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>