x Abu Dhabi, UAE Friday 21 July 2017

EU's car sales plunge to their lowest since 1993

European Union car makers, except luxury brands, are no nearer getting back on the road to growth, data released yesterday show.

European Union car makers, except luxury brands, are no nearer getting back on the road to growth, data released yesterday show.

Sales fell to a 19-year low, with French companies PSA Peugeot Citroën and Renault, and their Italian competitor Fiat posting the biggest drops, as a euro-zone recession hurts demand.

"The Latin car makers are historically more exposed to southern European markets, which are plunging. This may go on next year," said Florent Couvreur, an analyst at CM-CIC Securities in Paris.

Eleven-month registrations in the 27-nation EU fell 7.6 per cent to 11.3 million vehicles, the lowest figure for the period since 1993, the European Automobile Manufacturers' Association (Acea) said yesterday. The decline was propelled by a 10 per cent plunge last month.

The 17-country euro zone went into a recession in the third quarter. The European Central Bank is predicting none of the nations will post economic growth until 2014, the year car-industry executives also forecast an initial recovery in Europe's vehicle market. German car makers' regional market share last month rose at the expense of their French and Italian peers, with BMW beating Fiat for the month.

"There are clearly two worlds: on one side, the German car makers and on the other, the Latin car makers," said Mr Couvreur.

Including Switzerland, Norway and Iceland, European car sales last month fell 10 per cent from a year earlier to 965,918 vehicles. Eleven-month sales declined 7.2 per cent to 11.7 million cars. That's the lowest figure for the region since 1994, said Quynh-Nhu Huynh, the Acea's economics and statistics director.

The association has predicted a full-year market contraction to about 12 million cars, the fewest cars sold in Europe since 1995 and the sharpest decline since 1993.

There is "little reason to believe that EU volumes will grow next year, which means that the spread between EU-focused and export-oriented original-equipment manufacturers will only continue to widen," said Erich Hauser, a London-based analyst at Credit Suisse.

BMW, the world's biggest manufacturer of luxury cars, increased European sales 0.4 per cent last month to 67,200 vehicles, the only group-wide gain among the top seven car sellers in the region, according to the Acea.

Its market share last month rose to 7 per cent from 6.2 per cent a year earlier.

Peugeot's group sales in Europe fell 16 per cent last month to 105,284 vehicles, reducing the manufacturer's market share to 10.9 per cent from 11.7 per cent. Renault's European sales plunged 27 per cent to 82,885 cars, accounting for 8.6 per cent of the market versus 10.6 per cent. Fiat's sales in Europe fell 13 per cent last month to 59,152 cars, narrowing the company's market share to 6.1 per cent from 6.3 per cent.

Volkswagen, Europe's biggest car maker, posted a 2.5 per cent decline in sales in the region last month to 248,690 vehicles, as demand dropped 4.5 per cent at the VW brand and 2.3 per cent at its Audi marque.

* with Bloomberg News