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Euro car brands face slump

Ford was the biggest loser in August with sales down by almost a third on the previous year.

Factory closures are becoming increasingly probable after European car registrations fell to their lowest level in 22 years last month. The European Automobile Manufacturers Association (ACEA) notes the sales slowdown is accelerating and now predicts a slump of up to 10 per cent for the year.

In all, just 688,168 new vehicles were registered in August, the lowest total for the month since the EU data was first compiled in 1990. With some factories already running at 50 per cent of capacity, there is talk of Fiat, Ford and Opel closing the doors on some of their most unprofitable production lines.

“Something needs to give,” Fiat CEO Sergio Marchionne said last week, adding that Fiat will outline a blueprint for the “European challenge” when it releases third quarter results later this year. Ford was the biggest loser in August with sales down by almost a third on the previous year, a fact it attributes to a decision not to match rivals discounts during what is traditionally the slowest car sales month on the EU calendar. 

“There was a lot of short-cycle business and heavy incentives that we decided largely to refrain from, Ford of Europe's marketing chief Roelant de Waard says. The Volkswagen Group's massive product portfolio made it one of the few carmakers to increase sales, led by Audi increasing its share of the luxury car segment. 

In contrast, Opel/Vauxhall saw a 19 per cent fall in registrations, Fiat was down 18 per cent and both Renault and Peugeot/Citroen were hit with 13 per cent drops. Registrations by country largely reflect those hurting worst from the sovereign debt crisis. Greece and Portugal lead the way with falls of 40 per cent year-to-date, Italy is down by almost 20 per cent and Spanish registrations fell by 8.5 per cent. 

Ominously for France, registrations this year are down 13.4 per cent, while Germany, which accounts for one in three of all cars sold in Europe, has seen its market contract by 0.6 per cent. The French Government has fiercely resisted factory closures on its turf and criticised Peugeot last month when it announced it would shed up to 10,000 jobs and close a factory in the north of the country. That's not an option for Renault, with the government holding a controlling stake in the French carmaker.

Craig Duff
Contributing Journalist
Craig Duff is a former CarsGuide contributor and News Corp Australia journalist. An automotive expert with decades of experience, Duff specialises in performance vehicles and motorcycles.
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