April 19, 2011. Copyright 2011, Graphic News. All rights reserved

European car sales slip, although Germany, France manage gains; outlook mixed at best
By Neil Winton

LONDON, April 19, Graphic News:  Car sales were miserable across Europe in the first quarter if you weren't in France or Germany. The outlook for the rest of year looks mixed at best, while interruptions to complicated but crucial supply chains with Japanese suppliers after the tragic earthquake, tsunami and nuclear meltdown, may yet lead to big shortages of cars during the second quarter.

Car sales in the European Union slid 2.3 percent in the first quarter of 2011 to 3,583,185 compared with the same period of 2010, and the downtrend gathered momentum in March when sales dived 5.2 percent, according to European newsletter Automotive Industry Data (AID).

But this performance masked sharply contrasting fortunes across Europe. Sales in booming Germany, Europe's biggest market, zoomed ahead by 11.4 percent. France did well too with sales up over six percent. But the tottering economies in Britain, Spain, Italy and many smaller markets produced big negative numbers. Britain's sales fell nearly eight percent, Italy's over 27 percent and Spain was close to 30 percent down in the quarter.

Some manufacturers managed to buck the trend. GM Europe's Opel-Vauxhall subsidiary performed surprisingly well, boosted by the performance of the little Meriva mini MPV. Opel-Vauxhall raised its sales by 3.4 percent to 258,900. Market leader Volkswagen of Germany sailed on serenely with a 5.1 percent sales gain for a share of 21.6 percent. Other notable performers in the quarter included Nissan of Japan, up 20.4 percent, boosted by big demand for its Qashqai crossover and new Juke. Volvo also bucked the trend with a 13 percent sales gain, according to AID.

Leading the poor performers was Fiat of Italy with a sales meltdown of 26.6 percent. Ford of Europe was another laggard with a slump of 13.7 percent. Renault of France saw its sales fall 8.9 percent, while compatriots Peugeot and Citroen dropped 6.2 percent and 5.03 percent, according to AID, despite a strong home market.

The future looks uncertain for Western Europe with industry forecaster J.D.Power projecting a stagnant year with sales rising a barely perceptible 0.3 percent. Investment bank J.P. Morgan is probably the most positive forecaster around with a target of at least stagnation, and possibly sales gains in the low single digits.

J.D.Power said that Germany's strong performance was helped by the lowest unemployment in nearly 20 years and strong consumer and business confidence.

Peter Schmidt, editor of AID, said sales in 2011 will be marginally worse than last year, when they slid by five percent.

"That's chiefly because the healthy gains in markets like Germany, followed by France, are wiped again by this year's opposing negative forces in austerity-gripped markets like Spain, Italy, Greece and Portugal, to name but a few,” Schmidt said.
/ENDS