Car manufacturers set for slow growth, says PwC
The Midlands’ automotive industry is preparing for a period of slow growth, according to a report by PricewaterhouseCoopers LLP (PwC). The report warns the outlook for the industry remains uncertain, despite a rise of almost 48 per cent in the light vehicle assembly sector during the first five months of 2010.
The quarterly Autofacts report, which focuses on the 12 leading car producing countries, reveals that light vehicle assemblyup to May 2010 improved by 47.6 per cent compared to the same period in 2009.
But PwC warns this improvement was almost entirely due to the first half of last year being exceptionally weak. During the period, car makers began massive assembly and inventory reductions, fearing a steep worldwide sales crash.
The report warns that for automotive manufacturers in the European Union, fiscal tightening, driven by the need to reduce government debt in many countries, could negatively affect demand in the remaining months of 2010.
Andy Watts, director and manufacturing sector expert at PwC in the Midlands, said: “The end of the scrappage scheme is now working its way through the various markets and it has had less of an impact on sales than some expected. However, other factors are now entering the equation.
"In particular, the imminent cuts in public sector spending are likely to affect confidence levels and this could have a knock-on effect on demand for new cars in the short to medium term.”
