European car sales plummet to 20-year low

beemerEuropean car sales have gone off a cliff yet again. Reuters is reporting that the first half of 2013 was the worst for carmakers in two decades and it seems to be getting worse, as sales in June dropped 6.3 percent. 

With record unemployment in Europe and youth unemployment over 50 percent in some EU countries, the figures are hardly surprising.

The industry is also facing a host of other problems  and overcapacity is one of them. Fiat and Peugeot seem to have gotten the worst of it, dropping 13.6 and 10.9 in June respectively. 

It’s hardly surprising, as both outfits are running on fumes and selling outdated hatchbacks – both the 308 and Bravo are long overdue for replacement, along with the venerable Punto. The plucky Peugeot 208 is off to a good start, though.

Ford was an exception with a 6.9 percent rise in sales and the Volkswagen Group is still hanging in there, thanks to a fresh range of hatchbacks based on the new MQB platform. However, Audi was down 8.9 percent.

Car registrations in EU and EFTA countries fell 6.7 percent last month to 6,436,743, the lowest monthly total since 1993. IHS Automotive believes the market has bottomed out, but it’s still too early for anything resembling a recovery. In a recent interview BMW CEO Norbert Reithofer said things probably wouldn’t get better until at least the middle of 2014.

Even the mighty German market, which bucked the negative trend in recent years, shrank 4.7 percent in June. Sales in France and Italy dropped 8.4 and 5.5 percent respectively and we don’t even want to mention Spain and Greece.

However, Britain soldiers on with the sixteenth straight month of gains. Sales in June were up 13.4 percent, which is rather surprising.