Due to the robust economic performance thus far in 2017 the outlook for the automotive sector remains favourable for the rest of the year and in 2018.
- The automotive sector is not a major contributor in the Netherlands, accounting for 0.4% of Dutch GDP. In fact, VDL Nedcar and DAF Trucks are the only two car/truck manufacturers active in the Netherlands. According to the International Organization of Motor Vehicle Manufacturers OICA, production increased 0.7% in 2016, to 44,400 units. In H1 of 2017 new passenger car registrations accelerated to 19.9% year-on-year after growing 14.7% in 2016, while commercial vehicle registrations grew 3.6% over the same timeframe.
- The number of Dutch car dealers has reduced considerably since the 2009 economic crisis. Recently a consolidation took place in the wholesale-retail market for car spare parts, with just two large players left (Sator-LKQ and AutoBinck-PartsPoint).
- Profit margins in the Dutch automotive sector are generally good and expected to remain stable in 2017. The financial gearing of most businesses is not overly high, and banks are willing to provide loans to the sector.
- Payment behaviour in this sector has been good over the past two years, and the number of payment delays and insolvencies is low. Business failures have decreased since the end of 2016, and we do not expect any deterioration in the coming months.
- We maintain an open, case-by-case underwriting strategy due to the overall positive performance of the industry.
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Market Monitor Automotive September 2017
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