Dow Jones/Frankfurt
European auto makers continued to post rising sales in October despite persistent economic uncertainties in major markets, but analysts warn that risks in 2012 are intensifying, particularly as demand in the crucial Chinese market remains difficult to forecast. Volkswagen AG’s core VW brand remained “on a solid growth trajectory” last month with a 10.4% sales increase year-on-year to 430,800 vehicles, sales chief Christian Klingler said yesterday in a statement, though he added the company is keeping a very close eye on current developments in world markets. Demand has held up relatively well for most European car makers despite heightened sovereign-debt concerns in Europe, but demand in the region and some markets abroad has started to weaken as consumers delay big-ticket purchases amid a slowdown in the global economy. Still, the VW brand sold 4.24mn cars in the first 10 months, up 12% compared with the same period last year. China, the brand’s largest sales region, accounted for 1.45mn cars, up 11% on the year. BMW AG, the world’s best-selling luxury-car maker, yesterday posted an 8.3% sales rise to 139,276 cars for its BMW, Mini and Rolls-Royce brands and said sales rose 15% on the year in the January-to-October period to 1.37mn cars. Sales chief Ian Robertson said BMW “is well on its way to reaching its target of more than 1.6mn units and achieving an all-time high for sales in 2011.” The figures echo those of Volkswagen’s Audi premium brand which on Monday reported a 24% rise in sales to 108,500 cars in October and gave a bullish outlook for coming months. Last week, Daimler AG’s Mercedes-Benz cars unit posted a 3.1% sales rise to 111,683 cars in October and a 6.9% rise to 1.11mn sales of its Mercedes-Benz, Smart and Maybach cars in the first 10 months. However, Sanford Bernstein analyst Max Warburton struck a note of caution yesterday, cutting sales volumes and earnings expectations across the sector by up to 40% and forecasting earnings decline for most of the European auto companies in 2012. “We believe the most serious “known unknown” is Chinese premium car sales. The range of outcomes is far wider than for mature markets,” Warburton said. “No one really has a clue-which means earnings forecasts for German (car) stocks are based on finger-in-the-air guesses,” Warburton said. He now forecasts a 20% fall in Chinese car demand in 2012 from a 10% increase previously. China accounts for a large chunk of profits, particularly at BMW and Volkswagen. Warburton’s comments are in line with recent remarks from JP Morgan, Barclays and HSBC, which stated that visibility for the sector is getting worse, not better and lowered their respective market forecasts.