The Greek debt crisis is likely to impact some car manufacturers more than others. At risk are Fiat Chrysler and PSA Citroen with exposure of 12 percent to Greece and southern European countries. VW is the least affected with only 5.2 percent exposure.
Austerity measures in Europe have affected other countries in addition to Greece and in 2013 the European car market dropped to a 20-year low. It has partially recovered since but the Greek crisis is creating uncertainty and that may impact on consumers postponing purchasing decisions.
Even in Germany, the largest European car market, consumers feel unease about spending on big ticket items such as cars until the situation in Europe is clear. There is fear that other euro- countries may follow suit and ask for less austere measures or even ask for a bailout.
Mathias Wissman, president of the German automakers association VDA expressed the industry’s sentiment on the Greek issue.
He said: “The attitude must not be to keep Greece in the euro zone no matter what the cost, and that statement remains valid even after the referendum.”
However, the risk to carmakers of Greek exit from the euro and default on debts should not be exaggerated. The Greek car market is too small to cause any major tremors. Last year 71,000 new cars were registered in Greece compared to 1.36 million in Italy and 855,000 in Spain.
A great deal of speculation is focused on whether Greece would remain as part of the euro zone or exit the single currency. The deeper issue, however, is that Greece is no longer able to meet its financial obligations. Greece would find it hard to get credit in the future — either in or outside the euro zone. New data of recent transactions in Greece are not out yet but many analysts confirm that the Greek new car market no longer exists.
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*Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]
