European car sales plunge in December ends woeful year

FRANKFURT Wed Jan 16, 2013 2:00am EST

FRANKFURT Jan 16 (Reuters) - Europe's new car market shrank in December at its fastest monthly pace since October 2010, closing a year burdened by heavy declines in all major euro zone economies.

Two fewer working days on average helped send new car registrations in the European Union tumbling 16.3 percent last month to 799,407 vehicles, according to data published on Wednesday by the European automotive industry association ACEA.

The figures highlight the crisis for automakers in Europe, where over-indebted banks will not lend cash-strapped consumers the funds to buy new cars as austerity pushes joblessness to a record high of almost 12 percent.

Exceptions last month were non-euro zone EU members such as Britain and Sweden, where demand increased. But states not even in the EU like Switzerland and Norway suffered contractions.

Annual car sales volumes in the EU fell 8.2 percent to 12.05 million vehicles in 2012, the ACEA said. In the euro zone, they dropped 11.3 percent to just under 9 million, according to Reuters calculations.

For 2013, market forecaster LMC Automotive recently estimated a 3.1 percent drop in western European sales to 11.4 million vehicles, compared with levels of around 12.8 and 13 million in 2011 and 2010, respectively.

Among the worst hit last month were U.S. carmakers General Motors and Ford, where group sales each fell roughly 27 percent, with the Chevrolet brand leading them all lower and posting an even weaker month than its ailing sister Opel.

Even Volkswagen's sales of its core VW brand fell 22 percent. The December plunge at its luxury brand Audi nearly matched that.

Korean brands Hyundai and Kia remained a rare bright spot, gaining 10.5 percent and 6.8 percent respectively. The duo have made a name for themselves with attractively designed affordable cars that enjoy long warranties.

The worst monthly decline in recent years was the 27 percent drop in January 2009, while the worst annual contraction was 1993's slide of 16.9 percent.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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