It seemed yesterday's channel-stuffed and hope-ridden car-maker data in the US was seen by some as evidence that we are right back on track. However, ever ready to separate the reality from the fantasy, we offer the following charts, via Barclays' Julian Callow, that vividly illustrate the rapid decline in the pace of auto registrations (the actual end-users that is) over the past year. In particular, Callow notes, the pace of seasonally-adjusted auto registrations in Q3 for the four largest European countries was the weakest in the series history (back to 1995).
Via Julian Callow, Barclays:
The slump in auto registrations coincides with reports that European car dealers have been offering heavy incentives, including selling vehicles to themselves to boost sales (source: Automotive News).
From a macroeconomic perspective, the exceptionally weak data are consistent with the persistently gloomy reports from the PMIs (as discussed earlier today) and suggest downside risks to consensus expectations for activity during H2.
Therefore, in our view, there is a considerable danger of further weakness in auto production (for example, through reduced working time, extended holidays at the turn of the year), which would be another negative factor for euro area industrial production.