Carmakers Fret Emerging Markets Gloom Could Overshadow European Recovery
French carmaker Renault (RENA.
PA) has trimmed its growth forecast for the global market this year, in a sign the industry is becoming increasingly worried about volatile emerging markets even as demand in Europe starts to pick up.
Renault sales chief Jerome Stoll told the Geneva auto show on Tuesday the group now expected global car sales to rise by slightly less than the 2 percent previously forecast.
"While Europe is showing some signs of recovery, we are at the same time seeing some headwinds from emerging markets," he said, citing weaker than expected demand in Russia, Argentina, Turkey and Algeria in particular.
After a six-year sales slump, Europe's car market is finally showing signs of recovery as even countries hardest hit by a sovereign debt crisis move out of recession.
Industry data on Monday showed car sales in Germany, Italy and Spain rose last month, although they dipped in France.
But some emerging markets such as Brazil and Russia have seen a slowdown in demand, and executives are concerned the latest bout of volatility sparked by Russia's military intervention in Ukraine could lead to a further weakening.
"Some countries have seen their currencies devalue by 20, 30 or 35 percent.
That always has consequences .
very strong consequences if one doesn't produce locally," Christian Klingler, sales chief at Europe's biggest carmaker Volkswagen (VW) (VOWG_p.
DE), told Reuters at the show late on Monday.
"We're a major trade partner of Russia and are looking at the Ukraine and Russia with concern," added VW Chief Executive Martin Winterkorn.
Nonetheless, executives remain mostly upbeat about prospects for the global car industry, pointing to the continued strength of demand in China, the world's biggest autos market, and to recovery in the United States.
"It's a question of tenths of a percentage point," Renault's Stoll said of the French group's cut in its growth expectations.
Stoll said he was still confident of recovery in the French market, despite a drop in February sales, and added the strength of recovery in previously crisis-hit European countries such as Italy, Portugal and Spain was a "good surprise.
" "This might offset some of the headwinds that we are facing today in the rest of the world," he said.
Stoll said Renault was following events closely in Russia, where the French group and 43.
4 percent-owned alliance partner Nissan (7201.
T) are building cars with OAO AvtoVAZ (AVAZ.
MM) and taking control of the Russian carmaker this year.
Renault was better cushioned against a possible collapse on the Russian ruble than many rivals operating in the country because it sourced a high degree of parts locally, he added.