Europe Car Sales Dip On Weak Economy

Zacks Investment Research

The European Automobile Manufacturers’ Association or ACEA reported a 6.5% fall in car sales to 1.06 million units in April as consumers stayed away from showrooms in a weak economy triggered by the sovereign-debt crisis in the Euro-zone.

Most of the major markets recorded a double-digit fall in new car registrations in the continent during the month, except Germany and U.K.

Sales in Italy dipped 18% to 129,663 vehicles, Spain plunged 22% to 56,250 units and France slid 1.9% to 166,552 units. However, sales in Germany scaled up 2.9% to 274,066 units and in U.K. rose 3.3% to 142,322 units.

All the major automakers except Daimler AG (DDAIF) and Bayerische Motoren Werke AG (“BMW”), posted declines in sales. Both Daimler and BMW benefited from higher sales of premium brands in Germany.

Among the U.S. automakers, General Motors Company (NYSE:GM) posted an 11.1% fall in sales to 85,493 units, driven by lower Opel/Vauxhall (16.9%) and GM brand (50%) sales while Ford Motor Co. (NYSE:F) saw an 8.3% drop in sales to 79,223 units.

Among the Japanese automakers, Toyota Motor Corp.’s (NYSE:TM) sales ebbed 13.2% to 41,259 units and Nissan Motor Co. (NASDAQ:NSANY) sales shrank 19.5% to 29,719 units. However, Korean automaker Hyundai Motor Co. (HYMLF) saw a 1.3% rise in sales to 35,977 units.

In Europe, the top automaker Volkswagen AG (VLKAY) reported a 5.2% decline in sales to 261,571 units driven by lower sales of the namesake brand (8.4%) and Seat brand (22.4%). However, both of its Audi and Skoda brands did well during the month with 4.4% and 4% rise in sales, respectively.

The second biggest Paris-based carmaker PSA Group (PEUGY) revealed a marginal 258 units fall in sales to 132,466 units due to a 4% decrease in Peugeot brand sales.

Meanwhile, the third largest automaker, Renault Group, saw a 15.1% decline in sales to 89,724 units. The company’s CEO, Carlos Ghosn, stated that automakers in Europe will continue to suffer if the government doesn’t allow them to restructure and downsize workforce. Sales at Fiat Group (FIATY) tumbled 11.3% to 75,462 units driven by lower sales of the namesake brand (10.9%) and Alfa Romeo (31.3%).

However, sales at the world’s largest luxury carmaker BMW rose 2.6% to 68,334 units while sales at Daimler grew 1.1% to 56,677 vehicles. The improvement in sales was led by strong demand for their premium luxury lineups such as BMW brand and Mercedes-Benz.

Automakers are still concerned about car sales in Europe in the near term due to the continuous negative impact (such as lower consumer confidence) from the debt crisis. Some automakers have projected that the European auto market will shrink 5% in 2012. 

 
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