French bear brunt of Europe's deepening auto slump

PARIS/BERLIN Fri Dec 14, 2012 2:09am EST

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PARIS/BERLIN Dec 14 (Reuters) - Renault and PSA Peugeot Citroen led a 10 percent decline in European car sales, the market's first double-digit contraction in more than two years, as economic gloom spread north and east in November.

The French suffered most - closely followed by General Motors and Fiat - as demand weakened sharply at home, in Germany and in eastern Europe, according to data published on Friday by the Association of European Carmakers.

Total European registrations fell to 965,918 cars for the month and 11.69 million for January-November, down 7.2 percent on the same period last year.

With December a seasonally weak sales month, Europe appears on course to record a similar drop for the year as a whole, to about 12.2 million total sales - its lowest in close to two decades.

Paris-based Peugeot, which is scrapping more than 10,000 jobs and a car plant to stem losses, suffered a 16 percent regional sales slide as its home market shrank 19 percent.

Renault's November registrations plunged 27 percent as the spreading economic weakness hurt sales of its no-frills Dacia brand, which until recently had resisted the worst of the slump.

Ripple effects are still being felt from the collapse of austerity-strapped Mediterranean auto markets last year.

German registrations dropped 3.5 percent last month after a 0.5 percent dip in October. The decline also worsened in eastern Europe - from 2.2 percent to 6.7 percent in Poland and from 7.4 percent to 11 percent in the Czech Republic.

Volkswagen, Europe's biggest automaker, posted a 2.5 percent sales drop led by the core VW brand.

GM and Fiat both tumbled 13 percent, while Ford paced the market's 10 percent fall.

The last time European auto sales fell 10 percent or more was in October 2010, when the market recorded a 16 percent year-on-year contraction to 1.06 million cars.

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