Guest Post: European Car Engine Sputtering

Tyler Durden's picture


Submitted by Alexander Gloy of Lighthouse Investment Management,

According to data released by ACEA (European Automobile Manufacturers’ Association)  new passenger car registrations fell 8.9% in August after a decline of 7.8% in July.

European car markets are quite diverse; it makes more sense to look at them individually:


The PIIGS are firmly in control of the bottom (what’s up with those Nordics, Sweden and Finland?). Of the major markets, only the UK and Switzerland (thanks Mr. Jordan for the EUR/CHF peg) are in positive territory.

IMF-rebel Hungary seem to be doing fine while bail-out-escapee Iceland is shooting out the (head-) lights (with a total of 473 cars registered in August).

For trend analysis we look at 12-months moving averages, with 2007 = 100.

The top 5 markets by volume are Germany, France, UK, Italy and Spain:


Italy and Spain are showing little signs of recovery after shedding 40-60% of their 2007 registrations. Germany held up well, but has joined France in trending lower. The UK is holding up well considering it being in a recession.

Markets # 6-10:


Sweden, Belgium, Austria, and, to lesser extent, the Netherlands are rolling over. In Switzerland, consumers rushed to purchase imported cars as dealers had to pass on currency gains from Swiss Franc strength.

Finally, these fine markets:


Countries bailed-out with EU taxpayer money (Greece, Ireland, Portugal) display worsening trends. Non-bail-out countries like Iceland and Hungary had initially larger drops, but are on a recovery since then.

In 2011, Germany produced 5.8 million passenger cars, of which 77% (4.5m) were exported, making cars and parts the most valuable export good (EUR 185bn). Europe absorbs 60% of those exports. Almost a quarter of exports is going to the UK, with a similar amount going to China and Taiwan.

Conclusion: A heavily export-dependent German automotive industry looks vulnerable to setbacks in important markets.

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Thu, 09/20/2012 - 15:55 | 2816005 Haager
Haager's picture

Something seems to be done very right in Iceland that other countries didn't do. Oh, they didn't bail out the banks...


Thu, 09/20/2012 - 15:58 | 2816018 NotApplicable
NotApplicable's picture

Why does the Icelandic culture hate freedom?

Thu, 09/20/2012 - 16:06 | 2816042 Strut
Strut's picture

Shh! We don't talk about Iceland.

Thu, 09/20/2012 - 16:24 | 2816084 hedgeless_horseman
hedgeless_horseman's picture



There has never been a better time
to buy or lease a new 
Opel Ampera

Fun to drive with
370 Nm instant tourque!

Drive 40-80 km on pure electricity!

Hurry, while supplies last!


The battery takes about 6 hours to fully recharge using the boot stored charging cable. The Ampera can be plugged into a 240-volt/10 amp household outlet.

In the worst case, repeatedly recharging any electric vehicle at 16 A from a worn or damaged socket could cause overheating at the socket.

Reasons for being unable to charge could be a significant voltage drop between the neutral and protective earth circuit (indicating too-long wire lengths between distribution box and socket, a too-small wire gauge, or a bad connection); inadequate earthing/grounding impedance (indicating a missing or bad ground connection at the socket, distribution panel, or earth/ground point); or a non-dedicated electrical installation (indicating additional loads on the circuit). In general a dedicated circuit is required to charge the Ampera.


Thu, 09/20/2012 - 16:27 | 2816124 ParkAveFlasher
ParkAveFlasher's picture

I'll take one "nicely equipped".   I'll park it next to my platinum-edition Escalade in my circular 15-car EverStonePaveLock Italian quartz driveway.

Thu, 09/20/2012 - 16:33 | 2816165 cougar_w
cougar_w's picture

My '71 Opel GT looks better than that thing.

The car I mean. The woman is so-so.

Thu, 09/20/2012 - 16:45 | 2816211 yochananmichael
yochananmichael's picture

not a close up , but she looks hot to me.

Thu, 09/20/2012 - 17:06 | 2816265 ParkAveFlasher
ParkAveFlasher's picture

Put the convention bag over that sneering Euro-snob head FIRST

Thu, 09/20/2012 - 15:59 | 2816022 Dareconomics
Dareconomics's picture

And they have their own currency. If only Portugal, Ireland, Italy, Greece and Spain had old currencies they could start using, then they could end this debt crisis.

Fri, 09/21/2012 - 09:29 | 2817460 Ar-Pharazôn
Ar-Pharazôn's picture

and what do you think they will do a part printing more money (aka DEBT)?

Thu, 09/20/2012 - 15:57 | 2816012 NotApplicable
NotApplicable's picture

"Malinvestment, bitchez!" -- Mises

Thu, 09/20/2012 - 15:57 | 2816013 Blasé Faire
Blasé Faire's picture

I can only imagine what the typical used car salesman is like in some of those countries.

Thu, 09/20/2012 - 16:21 | 2816105 cougar_w
cougar_w's picture

Used car sales might be quite brisk, if they are not included in these numbers. I know around here, there are cars on the lots re-po'ed that look to be under a year old, sold for used.

Thu, 09/20/2012 - 15:58 | 2816015 The Count
The Count's picture

In other news:


Thu, 09/20/2012 - 16:01 | 2816025 Bunga Bunga
Bunga Bunga's picture

... but but but they can even create new airports:



Thu, 09/20/2012 - 16:22 | 2816110 cougar_w
cougar_w's picture

Caught short again were we?

Fri, 09/21/2012 - 03:10 | 2817066 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

You're right.  Steve's quality control is gone.  Check this out:  


Time to short

Thu, 09/20/2012 - 15:58 | 2816016 slaughterer
slaughterer's picture

GREEN Mfers.  That is the only comment w-while in Fed-land for next 2-3 months  FUK shorts.  

Thu, 09/20/2012 - 15:59 | 2816020 fonzannoon
fonzannoon's picture

Poor Biderman got eaten up by Schiff and sharted out by GS

Thu, 09/20/2012 - 15:58 | 2816017 Bunga Bunga
Thu, 09/20/2012 - 15:59 | 2816019 yogibear
yogibear's picture

LOL, Iceland defaulted on the banksters and now their economy is in recovery. The PIIGS should lave followed Iceland's lead.

Thu, 09/20/2012 - 16:24 | 2816115 cougar_w
cougar_w's picture

Iceland was small enough to be allowed to go their own way.

Thu, 09/20/2012 - 16:30 | 2816146 ParkAveFlasher
ParkAveFlasher's picture

The first one out of the burning theater did not panic.

Thu, 09/20/2012 - 22:42 | 2816743 Element
Element's picture

You may or may not be aware that Iceland implied Russian military basing and alliance was on offer from Iceland, in order to secure Russian bailout loans, after Lehman's imploded.

No one in NATO (NORTH ATLANTIC Treaty Organisation) wanted to risk that occurring right in the middle of what they were supposed to be all about, so they allowed Iceland to go it's own way.

Iceland basically had to make blunt geopolitically-loaded threats to force NATO sphere bankers to negotiate.  Iceland may be small but they are also a crucial strategic linchpin to protect NATO states from Russian SSBNs:

The Icelandic crisis is a good example of why geopolitics is underestimated with regard to how the PIIGS situation will play out. Questions of physical survival, are always going to trump elite banking self-preservation moves, and money preservation concerns.  And Banksters and Political puppets do respond, if you have a strong enough and damaging enough diplomatic and strategic hand to play, longer-term.

Fortunately Iceland did have that, knew they did, and understood how and when to use it, to assure their own security and best interests.  It's good to be a Sovereign state i.e. have your own currency and flexible foreign policy options that actually protect and serves your own needs and interests.

Fri, 09/21/2012 - 07:43 | 2817218 e-recep
e-recep's picture

Icelanders are terrorists. </sarc>

Thu, 09/20/2012 - 16:01 | 2816026 slaughterer
slaughterer's picture

For the AAPL short bevor: HUH?? AAPL $800 before $600.  Go ahead and short, if you need to loooozzeee $$$$>  Who cares about SJ?   (OK, I am obnoxious, Stockholms syndrome, tomorrow I toe the ZH red-neck doomer line, but today, I love Simon Potter and his Bayesian methods, luv em. amd ZH haas never even mentioned Bayse, although th fed luvs Bayse)>  

Thu, 09/20/2012 - 16:02 | 2816029 LawsofPhysics
LawsofPhysics's picture

Let be optimistic.  let's say that the earth becomes an efficient producer like Germany.  Who would the world's customer be?  Mars?

Thu, 09/20/2012 - 16:05 | 2816037 slaughterer
slaughterer's picture

Mars?  FUK NO, CHINA!!  LOL.   

Thu, 09/20/2012 - 16:09 | 2816045 LawsofPhysics
LawsofPhysics's picture

no, china is still part of the earth.  I mean let's face facts, the eltites wet dream is to have everybody work for chinese wages and then to simply be slaves.

Thu, 09/20/2012 - 16:21 | 2816103 slaughterer
slaughterer's picture

OK, LOP, +1.  You Earned it.  But what currency they got on MARS?   

Thu, 09/20/2012 - 17:07 | 2816267 12ToothAssassin
12ToothAssassin's picture


Fri, 09/21/2012 - 07:58 | 2817236 AnAnonymous
AnAnonymous's picture

the eltites wet dream is to have everybody work for chinese wages and then to simply be slaves.


Elites, hard to know. But 'americans' would want a source of human labour cheaper than the chinese.

Through 'american' economics, 'americans' planned a world tour of misery that should have worked the following:

-Allocate resources to an activity into an area
-locals work
-by product: locals use the share of consumption to better their own environment
-inflation, which shows through demand for higher wages
-'american' declaration that locals no longer want to work as they keep asking for higher wages
-activity is moved elsewhere


A world tour of misery as 'americans' would chase people who are interested in working from an 'american' point of view.

China derailed the process by trapping activity for much longer than desired by 'americans'

It is clear that by 'american' goals, chinese are already too rich and are asking too big a share of consumption.

'Americans' want a cheaper labour force than Chinese...

Thu, 09/20/2012 - 16:30 | 2816149 cougar_w
cougar_w's picture

There is nothing outside the earth system to be exploited for performance gains. The earth as a whole system cannot become more efficient, except perhaps to do different things better.

Thu, 09/20/2012 - 16:05 | 2816040 Urban Redneck
Urban Redneck's picture

Thanks to the SNB, I can't buy a new Mercedes imported from up the street in Germany for the same price as a Big Mac at ZRH.

Switzerland's 8.7% increase in new registrations would be a lot a higher w/o the peg, at least until until all those employed by exporters lost their jobs... But since I need to replace a car now, the peg kind of sucks.

Thu, 09/20/2012 - 16:45 | 2816205 Ratscam
Ratscam's picture

Do not forget that due to the 9/6/11 SNB intervention, the CHF/Gold price jumped considerably.
If you want to hold on to your physical gold and use fiat to buy your Audi/Posche/BMW/Mercedes/VW, contact Chris at they are spezialized in importing german cars for considerable discounts.

Thu, 09/20/2012 - 17:33 | 2816335 Urban Redneck
Urban Redneck's picture

Thanks for the info.   I would never trade physical metal for any car.   However, I would actually take the '71 Challenger on their website over a new German car any day.

Thu, 09/20/2012 - 16:06 | 2816041 PontifexMaximus
PontifexMaximus's picture

Germany will do the utmost to export, whatever it cost's to finance GR, ES and so on, in order to guarantee (full) employment in Deutschland. Never forget, dear Angela from Ostdeutschland want's to be reelected and she will be.....

Thu, 09/20/2012 - 16:08 | 2816044 Global Hunter
Global Hunter's picture

ZH poster Dork of Cork was posting about this (in part) on an earlier story, biggups

Thu, 09/20/2012 - 16:08 | 2816046 kito
kito's picture

it doesnt matter anymore. the ecb will just buy up the excess inventory....................................there is no free market anymore.................

Thu, 09/20/2012 - 16:11 | 2816056 LawsofPhysics
LawsofPhysics's picture

Correct, cnetral banks are monetizing the earth for fear of deflation/default and losing power once the defaults clear out the bad management and bad behavior.  The moral hazard is the only thing that needs to be addressed to fix anything.  The paper-pushers know there is no real value in their labor.  Long black markets....

Thu, 09/20/2012 - 17:31 | 2816331 Bunga Bunga
Bunga Bunga's picture

But you can redeem an old car in exchange for a carload of money.

Thu, 09/20/2012 - 16:11 | 2816055 Taint Boil
Taint Boil's picture



Dude, the person who picks the pictures for the articles on ZeroHedge is a genius... too funny.

Thu, 09/20/2012 - 16:12 | 2816057 Dr. Engali
Dr. Engali's picture

My conclusion is if you take the pain up front then you recover quicker rather than the suffering of a drawn out slow painful bleed.

Thu, 09/20/2012 - 16:16 | 2816080 Money 4 Nothing
Thu, 09/20/2012 - 16:24 | 2816120 walküre
walküre's picture

And then it was officially a Depression - capital D

So what if the ECB buys up every sovereign bond - which they can't - but even so?

People without jobs won't be buying cars. People with jobs but facing potential job loss won't be buying cars. People with jobs and perceived job security won't buy cars when money might as well get flushed down the toilet. Nobody has money to waste, nobody. Government (!) faced with austerity won't be buying cars or replacing fleets. Rental car companies won't buy cars when rentals are down and cars don't need replacement as soon as under regular capacity ops.

Car manufacturers in Europe have learned the hard way that China can manufacture the product much cheaper thus making margins on German cars for example less attractive. Chinese have their own sets of problems anyhow.

Anyone who understands the European economy which is by and large the German economy, knows how important the car and truck manufacturing sector is to the overall well being of the economy.


Thu, 09/20/2012 - 17:35 | 2816343 ghostfaceinvestah
ghostfaceinvestah's picture

A large % of German cars are purchased in the USA, with its re-born subprime auto loan financing.  Once the US is finally forced to reign in out of control government spending, that market will dry up.

Thu, 09/20/2012 - 16:40 | 2816136 THE DORK OF CORK
THE DORK OF CORK's picture

The problem with Europe is the core , not the periphery.....

The periphery feeds the core Oil capital withen the Euros corrupt market state capital structure.

Germany then wastes this energy /capital on mercantile oil consuming exports......France is making some efforts to change its fixed capital and transport investments but Germany is on auto pilot for the most part.


Whats really striking in the above graph is the rise of Icelandic heating oil demand …….at a guess I think during the heart of their crisis people remained in the capital where communal thermal volcanic heating was available cheaply and then when more disposable income was available they moved out to their more isolated second houses – but its just a Dorks speculation.

Fri, 09/21/2012 - 08:01 | 2817244 AnAnonymous
AnAnonymous's picture

Or icelanders are just capping some oil resource released from elsewhere.

It has to be consumed. So if somewhere, an 'american' can not do the consumption job, it is an opportunity for another 'american' to do the consumption job.

Thu, 09/20/2012 - 16:44 | 2816206 yochananmichael
yochananmichael's picture

how's gubmint Motors doing in Europe?

Thu, 09/20/2012 - 16:54 | 2816241 Schmuck Raker
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