European auto sales declined 4.6 percent in October, with Renault SA (RNO) and General Motors Co. (GM:US) reporting the largest drops, as a recession in countries using the euro discouraged consumers from making large purchases.
Registrations in the 27-member European Union plus Iceland, Norway and Switzerland fell to 998,899 vehicles from 1.05 million a year earlier, the Brussels-based European Automobile Manufacturers Association, or ACEA, said today. Ten-month sales decreased 6.9 percent to 10.7 million cars.
The euro-area economy went into a recession for the second time in four years in the last quarter, according to the European Union statistics office. The ACEA predicts Europe’s car sales will reach a 17-year low in 2012 and estimates that as much as 30 percent of production capacity isn’t in use. Carmakers are responding by shutting plants and cutting prices.
“Discounts have been going on for two years now,” said Xavier Caroen, a Paris-based analyst at Kepler Capital Markets. “People just don’t want to buy cars.”
The October decline slowed from an 11 percent plunge in September. Last month had an average two more shopping days in the region than October 2011, Caroen said.
Among Europe’s five biggest markets, Spain led car-sales declines with a 22 percent drop, and registrations fell 12 percent in Italy and 7.8 percent in France. Sales increased 0.5 percent in Germany and 12 percent in the U.K.
European sales by Renault, which is based in the Paris suburb of Boulogne-Billancourt, fell 21 percent to 86,735 vehicles. GM, which owns the Opel and Vauxhall brands in Europe, posted a 14 percent drop to 70,313 cars, led by a 21 percent plunge at its Chevrolet marque.
Opel is offering a 30-day money-back guarantee on cars in its home market of Germany to take the risk out of signing a contract to purchase or lease a new vehicle. Buyers can give the car back if they’re not satisfied and have driven less than 3,000 kilometers (1,860 miles), according to a promotional website.
Dealer discounts in Germany surged last month to an average of 12.5 percent off the list price, the highest level in more than two years and up from 11.1 percent a year earlier, according to trade publication Autohaus PulsSchlag. Fiat SpA, PSA Peugeot Citroen (UG) and Renault offered the steepest price reductions, ranging from 14.7 percent to 15.5 percent.
European sales by Wolfsburg, Germany-based Volkswagen AG (VOW3), the region’s biggest carmaker, rose 1.5 percent to 255,120 vehicles last month, as an 11 percent jump at its Audi luxury brand more than made up for declines at other divisions. Daimler AG, owner of luxury-car brand Mercedes Benz, posted a 3.2 percent sales gain to 53,178 units.
Registrations by Munich-based Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury cars, fell 1.4 percent in the region to 63,902 cars.
Peugeot, Europe’s second-biggest carmaker, sold 121,107 cars in Europe, a 5.1 percent decline. The Paris-based manufacturer said in July that it had burned through about 200 million euros ($255 million) in cash monthly at its automotive unit for the past year, and outlined plans to close a factory amid cost-cutting measures targeted at reducing its headcount in France by 8,000.
The French government has moved to support Peugeot, which is junk-rated by all three major ratings companies, by backing 7 billion euros in new bonds for its financing arm. The EU outlined plans on Nov. 8 to increase funding for the auto industry as part of an effort for a coordinated response with labor leaders and politicians to the car market contraction.
Fiat (F)’s European sales fell 5.8 percent to 64,736 cars. Dearborn, Michigan-based Ford Motor Co. (F:US), which is closing three plants in Europe, reported an 8.1 percent drop in sales in the region to 74,899 vehicles.
The European Commission, the EU’s executive body, is proposing to roughly double funds for research and development in the car sector to about 2 billion euros in the 2014-2020 budget, Industry Commissioner Antonio Tajani said on Nov. 8. The EU also plans to bring together carmakers, unions and government officials to discuss additional measures, including job cuts and plant closings.
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