The auto industry is caught up in a catastrophe that has spread across the globe as even the key emerging markets that manufacturers had banked on for growth have now ground to a halt, a top executive said on Tuesday. Christian Streiff, who heads Peugeot-Citroen, said he expects sales at Europe's second-biggest volume carmaker to fall 20 percent in 2009 and sees further pain in 2010 as there seems no end in sight to the sector's crisis. “What is striking at the moment is the worldwide catastrophe in the car industry because the Brazilian market, the Chinese market and the Russian market have stopped in their tracks just like the European market. That makes for a fall of over 20 percent,” Streiff told RTL radio. Car sales have been sinking fast in developed economies since the autumn as the credit crunch and worsening economic climate have combined to crimp big-ticket purchases, while a lack of visibility has made most manufacturers unwilling to make predictions for 2009. In January, US auto sales fell 37 percent, according to manufacturers' data, while corresponding figures for Europe due out on Friday are certain to show double-digit declines. Streiff spoke fresh from signing a deal with the French government that provides $3.87 billion in preferential-rate financing for Peugeot as well as for domestic rival Renault, the conditions of which have met with criticism from other EU nations. “The outlook for 2009 is terrible. The group is starting the year with a fall of more than 20 percent compared to a year ago in all countries combined,” Streiff said. “We are working on the assumption that the market in 2010 remains difficult.” Peugeot shares fell 4.5 percent in early trading but later recovered a little to trade 3.8 percent lower at 11:52 GMT while Renault was down 3 percent and the Dow Jones Stoxx Automotive Index fell 2.1 percent. PSA Peugeot Citroen is due to publish 2008 results on Wednesday and the average expectation for earnings before interest, tax depreciation and amortisation is for $6 billion, down from $8 billion in 2007. “People were excited ahead of yesterday's (financing) announcement and are now looking ahead to the full year results. They are nervous,” said Nomura International analyst Michael Tyndall. “People are probably disappointed that (carmakers) can't close factories - but this was very much expected ... This is countered by the fact that there is no equity element to the aid.” In exchange for the government loans, Peugeot and Renault promised to safeguard French jobs.
