Wed, Jun 19, 2013 - Page 15 News List

New car sales in EU fall to 20-year low

RECESSION BITES:Auto industry executives forecast that the European car market would shrink this year for the sixth year running, amid falling demand and recession

Bloomberg

Car sales in the EU last month fell to a 20-year low as rising joblessness caused by a recession in the eurozone contributed to falling demand at PSA Peugeot Citroen, Renault SA and General Motors Co.

Registrations in the 27-member EU dropped 5.9 percent to 1.04 million vehicles from 1.11 million cars a year earlier, reaching the lowest level for the month since 1993, the Brussels-based European Automobile Manufacturers’ Association said yesterday in a statement. Including figures from Switzerland, Norway and Iceland, sales last month fell 5.9 percent to 1.08 million cars.

The unemployment rate reached a record 12.2 percent in April in the 17 countries using the euro and manufacturing output in the area contracted last month, extending a decline to almost two years.

Europewide deliveries by Paris-based Peugeot, French competitor Renault, GM and Italian manufacturer Fiat SpA all fell at least 10 percent last month.

Auto-industry executives are forecasting that the European car market will shrink for a sixth consecutive year this year, with a possible recovery starting by the final quarter.

Peugeot Brand managing director Maxime Picat reiterated a prediction on May 22 that industry sales in Europe will fall 5 percent this year.

Group European sales at Peugeot, the region’s second- biggest carmaker, dropped 13 percent last month, with the Citroen division’s registrations plunging 15 percent and the Peugeot brand posting a 12 percent decline. Renault, based in the Paris suburb of Boulogne-Billancourt, reported a 10 percent drop. European sales fell 11 percent at both GM and Turin-based Fiat.

The eurozone’s recession, the longest since the common currency was introduced in 1999, deepened in the first three months of the year as investment and exports plunged. The European Central Bank widened its forecast of a full-year drop in the area’s GDP on June 6. The economies of Portugal, Italy, Greece and Spain will contract at least 1.5 percent, economists surveyed by Bloomberg predict.

The car-sales drop last month contrasts with growth in April that was the first gain in 19 months. Five-month Europewide registrations fell 6.8 percent to 5.26 million units, with demand in the EU declining at the same rate to 5.07 million vehicles.

Four of Europe’s five biggest automotive markets shrank last month. Deliveries in Germany, the region’s largest economy, dropped 9.9 percent, compared with a 3.8 percent increase in April. Sales declined 10 percent in France, 8 percent in Italy and 2.6 percent in Spain. Demand in the UK rose 11 percent.

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