European Union car sales in May fell to a 20-year low as rising joblessness caused by a recession in the euro region contributed to falling demand at PSA Peugeot Citroen, Renault and General Motors.
Registrations in the 27-member EU dropped 5.9 per cent 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, or ACEA, said today in a statement.
The drop contrasts with 1.7 per cent growth in April that was the first gain in the market in 19 months. Including figures from Switzerland, Norway and Iceland, sales in May fell 5.9 per cent to 1.08 million cars.
The unemployment rate reached a record 12.2 per cent in April in the 17 countries using the euro, and manufacturing output in the area contracted in May, extending a decline to almost two years.
Auto-industry executives are forecasting that the European car market will shrink a sixth consecutive year in 2013, with a possible recovery starting by the final quarter.
“Nobody’s buying cars,” and there’s “no reason to be optimistic,” as the sales increase the previous month was because of a calendar effect, Jens Schattner, a Frankfurt-based analyst at Macquarie, said before the ACEA released figures.
Any revival in deliveries won’t start until the end of the third quarter at the earliest, he said.
European sales by Paris-based Peugeot, the region’s second- biggest carmaker, fell 13 per cent in May.
Registrations in the region dropped 10 per cent at Renault, based in the Paris suburb of Boulogne-Billancourt, and 11 per cent at GM as well as at Turin, Italy-based Fiat.
The euro region’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 gross domestic product on June 6.
Deliveries in western Europe, which excludes countries that have joined the EU since mid-2004, fell 5.7 percent to 1.02 million vehicles in May.
Five-month Europewide sales dropped 6.8 per cent to 5.26 million units, with demand in the EU declining at the same rate to 5.07 million cars. Four of Europe’s five biggest automotive markets shrank last month.
GM's Opel brand deepened its average discounting to 15.2 per cent of the list price from 12 per cent a year earlier and Fiat offered price cuts of 13.5 per cent versus 12 per cent in the 2012 period.
Daimler chief executive Dieter Zetsche said on June 12 that the European car market is “bottoming out” and a “slight recovery” is possible in the region in the second half of the year.
The Peugeot brand’s Europewide sales fell 12 per cent in May, while the Citroen division’s dropped 15 per cent. Peugeot said on May 22 that demand for new vehicles in the region has started to stabilize at a “very low level.”
Maxime Picat, head of the Peugeot brand, reiterated a forecast that industry sales in Europe will fall 5 per cent 2013.
GM's European sales drop last month was propelled by a 23 per cent plunge at the Chevrolet brand, while Opel and its UK sister division Vauxhall posted an 8.4 per cent decline.
Detroit- based GM, seeking to restore profit in Europe after accumulating $18 billion in losses in the region since 1999, is reorganizing in response to the car-market drop with plans to shutter a plant in Germany and freeze pay for remaining workers through 2015.
Europewide sales by Michigan-based Ford fell 0.5 per cent in May.
The manufacturer, which is forecasting a combined loss of $3 billion in Europe for last year and 2013, said this week that it’s counting on new models such as the EcoSport compact sport-utility vehicle to help reduce reliance on low-margin sales to rental-car companies in the region.
Volkswagen, Europe’s biggest carmaker, posted a 2.8 per cent decline in sales in the region last month, led by a 7 per cent drop at its namesake brand.
The Audi division, the world’s second-largest maker of luxury vehicles, sold 3.9 per cent fewer cars.
Bloomberg