European car sales in December plunged the most in more than two years as recessions in the southern part of the region cut demand at Ford Motor Co. (F:US), General Motors Co. (GM:US) and Renault SA. (RNO)
Registrations fell 16 percent to 838,428 vehicles from 997,842 a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement. Full-year sales declined 7.8 percent to 12.5 million cars, with the slump in the European Union the worst in 19 years.
Carmakers have announced 30,000 job cuts and five factory shutdowns in Europe since July, with Renault and Paris-based PSA Peugeot Citroen (UG) planning workforce cutbacks of 17 percent in their home market of France. Manufacturers of mid-range cars have exacerbated losses with price cuts that failed to win buyers. Fiat SpA (F) was overtaken in European sales in 2012 by BMW, the world’s biggest maker of luxury cars, which posted growth.
“The concern is that German, Spanish and U.K. consumer confidence is slipping away,” Michael Tyndall, an analyst at Barclays Plc, said by phone. “Before we get too excited about stabilization in demand, we need to see consumers in those key markets to start to feel a bit happier.”
GM slid (GM:US) 4.1 percent to $29.35 at 9:43 a.m. New York time, after earlier declining as much as 5 percent to $29.07, the biggest intraday decline since June 4. Ford dipped 0.8 percent to $14.23. Peugeot was trading down 4.4 percent in Paris, while Renault declined 1.6 percent. Fiat dropped 2.4 percent to 4.22 euros in Milan.
The ACEA compiles figures from the 27-nation EU, Switzerland, Norway and Iceland. The drop in December was the biggest since October 2010, when demand declined as government incentives to trade in older vehicles expired, and 2012 was the fifth consecutive year of declining registrations.
“The actual decline is much worse than the statistics would have us believe, as sales figures for the year were artificially inflated as a result of self-registrations by dealers and automakers, especially in the region’s biggest market, Germany,” Peter Fuss, senior advisory partner at Ernst & Young’s Global Automotive Center, said today in a report.
Renault Chief Executive Officer Carlos Ghosn said in an interview yesterday in Detroit that the market may shrink by another 3 percent in 2013. Peugeot estimated on Jan. 9 that the contraction may be as much as 5 percent. Faurecia, Europe’s biggest maker of car interiors, said car production in the region dropped 13 percent in November and 18 percent last month.
European sales by Dearborn, Michigan-based Ford fell 27 percent in December. The manufacturer, which is forecasting a combined loss of $3 billion in the region for last year and 2013, is shutting vehicle and component plants in the U.K. and Belgium in the next two years.
GM’s group sales in Europe last month also dropped 27 percent, led by a 30 percent decline for the Chevrolet brand. The Detroit-based company’s Opel division said Dec. 10 that it will stop making cars at its plant in Bochum, Germany, in 2016, where the assembly line employs about 3,100 workers. The shutdown would be the first of a German auto plant since World War II.
Renault, which is based in the Paris suburb of Boulogne-Billancourt, and Peugeot each posted a 19 percent plunge in European sales in December, the ACEA said. Turin, Italy-based Fiat’s registrations decreased 18 percent.
Bayerische Motoren Werke AG’s European sales in December rose 0.6 percent, the only carmaker in the region’s top 10 to post an increase, as a 3.8 percent jump at the namesake BMW’s brand more than made up for an 11 percent drop at the Mini marque. The Munich-based manufacturer moved up one level to rank sixth in European car sales in 2012 at 799,277 vehicles compared with Fiat’s 798,542 registrations, according to the ACEA.
Four of Europe’s five biggest automotive markets shrank last month, with deliveries in Germany, the region’s biggest economy, falling 16 percent. That cut full-year sales in the country 2.9 percent to 3.1 million vehicles. The U.K., with an increase of 5.3 percent to 2 million cars in 2012, overtook France to become Europe’s second-largest automotive market.
Fiat Chief Executive Officer Sergio Marchionne told reporters at the Detroit car show on Jan. 14 that volume producers together probably lost 5 billion euros ($6.7 billion) in Europe in 2012, and carmakers must find a “solution” to restore earnings in the region.
Renault said yesterday that it will eliminate 7,500 jobs in France through 2016, including 5,700 posts that will disappear when people retire or quit and aren’t replaced. Its global workforce totaled 128,322 employees at the end of 2011.
The move follows job cuts and factory shutdowns in Europe announced in the past two months by Fiat, Peugeot, GM and Honda Motor Co. (7267) Tokyo-based whose sales in the region dropped 6.7 percent in December, said on Jan. 11 that it will eliminate as many as 800 positions at its auto plant in Swindon, England.
Fiat and Peugeot each said in December that they plan to cut 1,500 jobs. The measures at Peugeot come on top of an 8,000-post cutback it outlined in July, when the carmaker also said it will close an auto factory on the outskirts of Paris, and disposals last year of non-manufacturing assets.
Renault and Fiat don’t foresee a need to shutter more plants in their home countries, Ghosn and Marchionne said yesterday at the North American International Auto Show in Detroit.
Sales in the region by Wolfsburg, Germany-based Volkswagen AG (VOW), Europe’s biggest carmaker, dropped 15 percent in December, led by a 20 percent plunge at the VW brand. The Audi division, the world’s second-largest maker of luxury vehicles, sold 18 percent fewer cars.
Daimler AG’s European sales fell 7.7 percent last month, with demand declining 5.6 percent at the Stuttgart, Germany-based company’s Mercedes-Benz brand, the world’s third biggest maker of luxury cars, and plunging 27 percent at the Smart two-seat division.
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