EUROZONE DATA
Eurozone auto sectors are facing structural challenges including struggling to keep up with the shift to EVs and Chinese competitors.
- September data from the four largest eurozone members showed Italy saw the biggest sequential decline in production of motor vehicles printing a deterioration of 10.3% M/M, followed by Germany (-7.8% M/M) and France (-2.0% M/M). Spain, on the other hand, printed a slight increase of 3.4% M/M after flat production in August.
- Germany's decline follows a 7.8% M/M decline in July and 15.4% M/M jump in August, putting the September index level broadly in line with June's. The volatility in the German series broadly correlates across the four eurozone members, though the German series most recent volatility has been more pronounced.
- Looking at the broader picture, all four main eurozone members production levels remain below pre covid levels, with France and Italy vehicle production deteriorating by a greater magnitude than Germany and Spain.
- Though, the deterioration in German vehicle production will have a greater impact on its economy given its weighting in the economy. Some of the volatility in headline IP data in Germany recently can be attributed to vehicle production.
- Recently Ford announced plans to cut jobs at Europe sites given slowing EVs momentum, whilst Volkswagen is also closing sites particularly in Germany due to a slump in demand for EVs and increasing competition from Chinese manufacturers.
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