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Economy in Brief

Selected Car Registrations In Europe
by Robert Brusca November 03, 2009

The auto sector is giving Europe a boost as incentive programs are still helping to stimulate sales. Only Italy and Spain have reported registrations for October but despite poor growth in both regions auto sales are growing in strongly. Spain’s sales are up by 1.7% m/m in October and up at a 99% annual rate over three months even as unemployment has hit a 10Year high there. Italy backed off in October after a strong September.

Troubles in the financial sector have banks as less than wiling lenders. Tough economic times have put consumers on the sidelines. But government programs to stimulate demand with outright subsidies linked to the scrappage of old poor-mileage vehicles has been a way to stimulate demand and to vest theses programs with some sense of a public purpose.

EMU Italy and Spain all saw sales crater at about the same time. Despite different auto incentive programs in different countries we see that Spain and Italy, two of the more challenged EMU economies, with auto sectors that are very much in sync with the rest of Europe. Evidence is that the recession in EMU is ending.

The EU Commission today issued a new outlook for the Zone and confirmed that it sees recovery taking hold. It sees a contraction of 4.1% for the EU area this year followed by growth of 0.7% in 2010 and of 1.6% in 2011 and roughly similar growth metrics for the Zone. This outlook is a hike in its forecast from its previous stance than growth in 2010 would contract by 0.1% in EMU.

E zone Car Registrations
  Mo/Mo % 3Mo Trend From 6Mo Trend From 12Mo Trend From
All Seas Adj Oct 09 Sep 09 Aug 09 Oct 09 Sep 09 Oct 09 Sep 09 Oct 09 Sep 09
Italy -1.6% 19.3% -13.6% 5.8% 13.4% 16.1% 44.9% 14.5% 6.2%
Spain 1.7% 28.8% -9.3% 99.0% 158.6% 117.0% 181.5% 25.8% 17.7%
base Month of Calc Sep-09 Aug-09 Jul-09 Jul-09 Jun-09 Apr-09 Mar-09 Oct-08 Sep-08
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