Consumer durables is a cataloguing of consumer goods that are not essential to be bought very often as they are fashioned in a way so as to last for an extended period of time. Profits in the consumer durables sector were most profoundly…
BMI View: Declining real wages coupled with high inflation will drag on passenger vehicle sales as
consumer purchasing power is eroded. Although we maintain a broadly negative outlook for the domestic
vehicle industry to 2020 as it remains below its previous peak level, total vehicle sales will return to positive
growth in 2017 and continue growing to 2020.
? Falling real wages, due to decreasing gross wages, and working hours alongside high inflation will all
weigh on consumer purchasing power and confidence leading to faster sales declines in passenger cars
than in commercial vehicles.
? The renewed scrappage scheme and other industry subsidies will help the market find its floor in 2016
but will be far less effective than in previous years.
? Pricing pressures to remain high due to costly supply chain restructuring towards local suppliers and the
introduction of Euro 5 standards.