Car sales declines thwart upturn hopes in Europe; US better off

Reuters/ParisCar sales extended their declines in France and Spain last month, data showed yesterday, leaving little hope of a European auto market rebound anytime soon.Volkswagen and US car makers led a 15% drop in French registrations to their lowest January level in 15 years, while renewed subsidies only just slowed Spain’s market contraction to single digits.“The French passenger car market started 2013 on as weak a note as it exited 2012,” London-based Credit Suisse analyst David Arnold said in a note.Ongoing declines across Europe suggest manufacturers will have to cut vehicle output by a further 7% this year, he predicted — adding to excess capacity that is already inflicting deep losses on volume brands.European auto sales last year fell the most in two decades to a 17-year low, as austerity-squeezed household budgets and unemployment fears discourage big purchases.Cautious hopes for a broader eurozone economic recovery have yet to filter through to the car market.Renault and Japanese affiliate Nissan are not counting on a European recovery in the next three to four years, Carlos Ghosn, chief executive of both, said this week.In Germany, where growth turned negative last May, car sales are expected to show a further monthly decline on Monday.Renault’s domestic registrations fell 7.4%, holding up better than the market thanks to a 9.9% gain for its low-cost Dacia brand, as scarce buyers gravitated to “crisis cars” such as the no-frills Sandero compact and Duster SUV.Struggling French rival PSA Peugeot Citroen, which is cutting 8,000 French jobs to restore profitability in 2015, saw sales plunge a further 16.7% at home.Without the benefit of recent updates to the Renault Clio and Peugeot 208 small car — Europe’s December bestseller in the category — the numbers would have been even grimmer.“Demand is still very weak for small and medium-sized cars and minivans,” said Francois Roudier of the CCFA industry association.The Americans fared worse. Combined French registrations by General Motors’ Chevrolet and Opel/Vauxhall brands dropped 21.2%, and Ford sales plunged 35.3%.The Volkswagen group also recorded a 23.9% drop in French car sales, a decline accentuated by a strong sales performance at the start of 2012.In recession-hit Spain, where unemployment stands at 26%, monthly registrations fell 9.6% despite support from sales subsidies of €2,000 ($2,700) per car reintroduced in October by the government and industry.Peugeot’s Spanish tally shrank by more than one-third in January, while the core VW brand fell one-fifth.But a sales surge by Fiat’s retro-styled 500 model delivered a 14.7% gain for the Italian brand in Spain. Renault Clio sales also doubled with the model update, helping the French nameplate to a 5% increase overall.Meanwhile General Motors and Ford Motor, the two largest US auto makers, reported better-than-expected January auto sales, buoyed by a strong showing in small cars and crossovers.GM forecast the auto industry’s annual sales rate for the month would be 15.3mn vehicles, about in line with the 15.2mn rate expected by analysts polled by Thomson Reuters.GM, the largest US auto maker, posted a 16% increase in sales, boosted by higher sales of its Chevrolet Equinox mid-size crossover and a nearly one-third jump for the Silverado pickup truck.Ford, the No.2 US auto maker, posted a 22% jump in sales, helped by the Fusion mid-size sedan that it launched last year.US auto sales are expected to continue the strong pace set at the end of last year, with industry sales rising as much as 15% due to an improving housing market and pent-up demand for cars and trucks.Chrysler Group, the third-largest US auto maker, projected an industry annual sales rate in January of 15.5mn vehicles, including medium- and heavy-duty trucks that typically account for around 300,000 sales a year.Chrysler, majority-owned by Italian auto maker Fiat, posted January car sales of 117,731, up 16% for a year earlier. The sales were its best since 2008 but fell short of several analyst estimates.Jeep sales were down 4%, as Chrysler phases out the Liberty model and prepares to launch its successor later this year. Sales of the Fiat 500 jumped 31% to 2,503, while the Dodge Dart hit 7,154, the highest level since the car’s introduction last June.