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European Car Sales Crash Most In 2 Years But Q4 Earnings Hope Remains

Tyler Durden's picture




 

Just when the channel-stuffed world was hoping for some good news, European car registrations pop up to smack the dream back to reality. A 10.8% YoY decline, the biggest drop in two years, makes it 11 months-in-a-row of dropping YoY comps. Before the crisis began, car registrations had risen on average 1.7% YoY each month; in the 4.5 years since they have dropped on average 4.7% YoY each month. The Eurozone year-to-date is -10.5% with Cyprus (-19.4%), Greece (-42.5%), Italy (-20.5%), Portugal (-39.7%), and Spain -11.0%. However, Spain's very recent past has been extreme to say the least with a 36.8% YoY drop from last September. Interestingly, Land Rovers are up 42.3% YTD while Alfa Romeos are down 31.6% YTD (and Mercedes and BMW down around 1% YTD). But apart from that, Europe is doing great - just look at earnings expectations for Q4.

Critically there is no V-shaped recovery occurring this time... the 13-month period of 2008/9 was mostly retraced by now... the current 11 month period of YoY falling comps is re-accelerating!...

 

and yet... just like in the US, Q4 earnings will miraculously shoot higher...

 

Charts: Bloomberg and Morgan Stanley

 

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Tue, 10/16/2012 - 02:39 | 2893255 mick68
mick68's picture

As long as there's liars and people wanting to be lied to, this could go on a while, until it doesn't.

Tue, 10/16/2012 - 02:42 | 2893257 PUD
PUD's picture

The data is skewed by the fact that no trucks are needed anymore to pick up dumpsters in Spain (they're empty) and no trucks are needed to deliver fresh produce to Greek markets (extended expiration dates)

Tue, 10/16/2012 - 02:58 | 2893272 Ar-Pharazôn
Ar-Pharazôn's picture

lol +1

 

but i still have to understand if you were sarc or serious :P

Tue, 10/16/2012 - 07:37 | 2893738 dearth vader
dearth vader's picture

Add Dutch car sales to your list: From dft.nl, today:

Netherlands car sales plummet

BRUSSELS (AFN) - Car sales in the Netherlands in September plummeted 27.7 percent lower than a year earlier. Only in Spain, Greece and Cyprus, the number of cars sold last month were lower. According to new figures of the European industry association ACEA, this shows that car sales in the European Union in September have decreased for the twelfth consecutive month. Sales fell compared with the same month in 2011 by 10.8 percent to 1,099,264 vehicles.

 

Tue, 10/16/2012 - 02:51 | 2893265 cynicalskeptic
cynicalskeptic's picture

Does your car have to be registered for you to live in it- or only if you're actually driving it?

Tue, 10/16/2012 - 04:06 | 2893326 Pretorian
Pretorian's picture

Car production exceeds car demand by treefold. That chart is not that bad YET.

Tue, 10/16/2012 - 04:09 | 2893327 Urban Redneck
Urban Redneck's picture

Perhaps some European mechanics figured out that if they didn't actually fix broken cars (for a change) that they might be joining the ranks of the unemployed...

Tue, 10/16/2012 - 04:20 | 2893335 turbosuperman
turbosuperman's picture

It requires about 7 gallons of oil to produce a tire.

http://www.rma.org/about_rma/rubber_faqs/

Net Hubbert Curve:

http://www.theoildrum.com/files/Net%20Hubbert_6.png

Enjoy the Oil Age; it's almost over.

Tue, 10/16/2012 - 05:21 | 2893649 AnAnonymous
AnAnonymous's picture

Enjoy the Oil Age; it's almost over.
____________________

Some people around the world never entered it.

For a large number of 'americans' around the world, it is far from being ended.

For 'americans' in Europe, it is just that their sacrifice is required in order for the rest of the 'american' world to keep going on.

'Americans' will start enjoying sacrifying themselves out of their free will for the common good of humanity.

Welcome to an 'american' world.

Tue, 10/16/2012 - 05:46 | 2893664 turbosuperman
turbosuperman's picture

You sound like you're high, and I'm not exactly sure what you're talking about.  I've been drinking whiskey, so I'll rant.

It's been an American world since World War II.

Bretton Woods System was our spoils of war.  The first empire by invitation, to some degree - Marshall Plan.

Closing the gold window and establishing the petrodollar was a brilliant move.

Our debt will never be repaid with dollars worth anything.

Europe is getting what they deserve for their welfare states, just like the US will be soon.

Without oil, the planet's carrying capacity is around 1 billion.  So, 6 out of 7 people on the planet owe their existence to the Oil Age.

Personally, when the store shelves go empty due to dollar collapse/nuclear war, I have a nice bottle of scotch and a hollow point bullet ready to take me out of this world.

Tue, 10/16/2012 - 05:59 | 2893678 AnAnonymous
AnAnonymous's picture

Without oil, the planet's carrying capacity is around 1 billion. So, 6 out of 7 people on the planet owe their existence to the Oil Age.
____________________________________

Sure, probably 'american' computations.

The reality is more like the reverse, one billion people owe their existence to oil.

Carrying capacity is around 1 billion? One billion of what? One billion 'americans' is already too many and the earth carrying capacity is outmatched.

As shown today, the Earth carrying capacity is less than one billion 'americans'

Maybe time to give a new go and go back to the work table...

Tue, 10/16/2012 - 06:54 | 2893709 turbosuperman
turbosuperman's picture

http://www.paulchefurka.ca/Population.html#Peak_Oil

You're obviously jealous of Americans.

SUVs are awesome, so you should be.

Tue, 10/16/2012 - 06:53 | 2893710 malikai
malikai's picture

Cool. Report to the soylent factory for processing at your earliest convenience.

Tue, 10/16/2012 - 06:14 | 2893685 jeff montanye
jeff montanye's picture

why wait?

Tue, 10/16/2012 - 06:41 | 2893701 turbosuperman
turbosuperman's picture

As long as I'm physically comfortable, there's no reason to not see what tomorrow brings.

Tue, 10/16/2012 - 04:37 | 2893367 Peter Pan
Peter Pan's picture

I suspect that donkey sales are up in some southern European countries to counter the plunge in auto sales.

On a more serious note, it should be noted that hundreds of thousands of vehicles were taken off the road in Greece and the number plates handed in so as to avoid auto taxes. People just could not afford to run their vehicles and pay the various circulation taxes. So even if vehicles are being bought, I suspect that it will be mostly second hand vehicles that will be the ones meeting the demand for cars.

Tue, 10/16/2012 - 05:12 | 2893642 turbosuperman
turbosuperman's picture

Tyler, Charles Biderman was on Worldwide Exchange a minute ago.

Why did he quit submitting to ZH?  Haven't seen any posts on ZH from him for some time.

Tue, 10/16/2012 - 05:12 | 2893643 Quintus
Quintus's picture

No doubt the Europhiles will spin this as proof that the Euro is doing an excellent job in reducing pollution and decreasing Carbon emissions.  Therefore, we need more Europe to continue the good work.

Tue, 10/16/2012 - 05:41 | 2893660 timbo_em
timbo_em's picture

My Hollande-inspired Keynesian plan to fix this: Everyone gets an (electric) Peugeot, Renault or Fiat and the bill goes to the ECB who just Ctrl+Ps the money.

Tue, 10/16/2012 - 05:58 | 2893677 I am Jobe
I am Jobe's picture

EU needs cash for clunkers bitchezz. Send Timmy and Ben over there to spread thier ass.

Tue, 10/16/2012 - 06:25 | 2893692 orangegeek
orangegeek's picture

The quality of reported data is going to get more suspect as we head down in the markets. Denial all the way down.

 

Another quarter of higher earnings on lower revenue - slash and burn to prosperity.  Another long lasting strategy.

 

It looks like nothing will happen until after the election.  SP500 found a way to move up yesterday.

 

http://bullandbearmash.com/chart/sp500-climbs-support-today/

 

 

Tue, 10/16/2012 - 06:59 | 2893711 Monedas
Monedas's picture

Volt means no more Mexicans asking for jump starts from your Audi to their 1965 Chevy pick up !      Volt is the "Space Shuttle" of bail outs !         Once you go Korean .... you'll never go European !

Tue, 10/16/2012 - 07:15 | 2893724 negative rates
negative rates's picture

Nice phrase but they both probably produce future junk yard material, made to be worked on constantly.

Tue, 10/16/2012 - 07:42 | 2893743 THE DORK OF CORK
THE DORK OF CORK's picture

The misallocation of capital via BMW production is at the heart of the Euro crisis. Germany has a below EU average fixed capital formation of 18.2% so as to sustain its mercantile dreams.

 

Imagine a simple but extreme slave state / trade model.

England is the primary consumer of goods for its Villas such as marble products , fine wines , refined metal work etc etc.
The Rhine / Rhur region is the producer of these goods.
But the crops (bread) which supply the energy for its slaves is reducing by 2% a year.
To continue to do what it does the Rhine Rhur Jurisdiction decides to increase efficiency rather then productivity. ( productivity = investing more in agriculture which is really energy in a slave state)
However it gets the same or more goods for less by reducing the calories of its workforce……this appears to work until you finally hit a entropy wall.

The modern German production machine which orbits the Rhine / Rhur is the most efficient in the world , however it has become efficient by destroying its long term productivity.

http://www.youtube.com/watch?v=aRghETHFvYs

(its energy density declines year after year because for example it has given up the Nuclear energy thingy which is very capital intensive , it therefore prefers to run down its capital and express a short term profit.)

Eventually deficit England will not receive the goods.

These weird trade systems have very little redundency……they were built that way to increase their short term labour arbitrage profits as global finance houses control the money supply of these former nations.
However a vast amount of capital (oil and stuff) is lost in this from a global perspective pointless trade.
The UK is perhaps the most extreme deficit large country whose credit based demand can shift capital allocation worldwide.

PS
The UKs primary trade “partner” is Germany but it has a larger trade deficit with China which is a extreme colony.
The UKs trade deficit with China was -£22,203 in Y2011 although it has come down a bit since Y2010 and is showing continual signs of weakness.
China will come out worst from this crash but there is really nothing there withen the UK….its a empty box.

It all starts with the credit note and not the production process.

Need I say this is game theory played at the highest level possible.

Tue, 10/16/2012 - 07:50 | 2893756 THE DORK OF CORK
THE DORK OF CORK's picture

In September, the EU* recorded a total of 1,099,264 new cars, or 10.8% less than in the same month a year ago. Looking at the major markets, the British was the only one to expand, while Germany (-10.9%), France (-17.9%), Italy (-25.7%) and Spain (-36.8%) all faced a double-digit downturn.

The British are the last men standing with a credit note............they are simply wasting Europe to a point they are getting negative income from the rest of the world (which is almost unheard of in the UK as they have always earned a income from the planet)

The Brits want real goods from the Rhine /Rhur region over and above income.

This is very very big news people.

Tue, 11/13/2012 - 02:31 | 2975320 mikehussy36
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