Slump continues in European car market

4 September 2013
BERLIN/PARIS: Amid signs that consumer attitudes are changing towards car ownership in Europe, new data for August has revealed steep declines in sales across the region's biggest car markets. 

Registrations of new cars in Germany fell -5.5% to 214,044 units last month, according to the Federal Transport Agency, compared to a 2.1% rise in July.

Elsewhere in continental Europe, sales fell -11% to 85,565 vehicles in France, -7% to 52,997 in Italy, and -18% to 38,872 in Spain.

The European Automobile Manufacturers Association (ACEA) has found overall registrations in Western Europe fell -6.6% in the first half of this year, after recording a -8.1% decline to 12.8m vehicles last year from 2011.

Analysts attributed the ongoing decline to a range of developments, including the region's weak economic growth, the decline of the car as a status symbol in Europe, declining populations in some countries and the greater reliability of new cars, which reduces demand for replacements.

Jean-Marc Gales, the head of CLEPA, or the European Association of Automotive Suppliers, said declining levels of car ownership in major cities like Paris – where car ownership, at 280 cars per inhabitants, has fallen to the same level as Poland – is a trend that "isn't going away".

He said: "Some car makers say they see light at the end of the tunnel in Europe. I wonder what light that is and whether they're wearing special glasses because I have not seen that."

Felix Kuhnert, a senior automotive consultant at PricewaterhouseCoopers, also agreed that the market in Western Europe had reached saturation point while Elmar Kades, a consultant at AlixPartners, summed up the situation to the Wall Street Journal as "flat is the new up".

He expected capacity would have to be cut by a further 2m vehicles and that this would lead to manufacturers being forced to close some of their factories.

Data sourced from Wall Street Journal, Automotive News Europe, Reuters; additional content by Warc staff
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