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No Easy Path For Europe’s Motor Industry

Further proof, if proof were ever needed, that Europe’s economic revival is still a long way off. Today’s sales figures for June from the European Automobiles Association (ACEA) showed a dramatic 5.6% year-on-year slump in car sales within the European Union – to the lowest levels since 1996. Not even rock-bottom lending rates have managed to encourage consumers to dip into their wallets.

It won’t exactly comfort the motor manufacturers that June’s figures weren’t the very worst on record – at least in volume terms. That accolade went to May 2013, which had seen a 5.9% fall to the lowest levels since 2003.

But whichever way you slice and dice the statistics, the downward trend is more than clear. A combination of slow banking reform, government austerity and high and often rising unemployment have dissuaded consumers at almost every level from taking on large new financial commitments.

Winners and Losers

Car sales during the first half of 2013 fell by 8.1% in Germany, by 11.2% in France and by 10.3% in Italy; in Spain, according to the ACEA. Spain’s sales fell by another 4.9% from an already very low level.

Peugeot Citroen has been suffering more than most, with a 10.8% year-on-year fall in June. But its worries were eclipsed by Fiat, which suffered a 12.6% sales decline. General Motors’ sales were down by 9.9%, but its main-market rival Ford actually saw an 8.1% growth in sales levels.

Aspirational brands such as BMW (down 7.7%) suffered in contrast to the relatively strong performances of cheaper brands. Seat raised its June sales by 12.2%, while Romania’s Dacia, owned by Renault, saw its sales up by an impressive 17%.

Rather amazingly – or perhaps not – the big exception to all this gloom was in the United Kingdom, where June sales were up 13.4%, bringing the first-half increase to 10%.

Britain does have a much larger proportion of fleet car buyers than its continental rivals, and its unemployment figures are nowhere near as bad. But today’s ACEA figures have shown the 16th consecutive monthly improvement. The Chancellor must be doing something right.

 

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