Car sales in Europe continued to slow down ever since October
last year owing to lower consumer confidence on the heels of a weak
economy triggered by the sovereign-debt crisis in Euro zone. Free
road tax, steep discounts and other incentives by automakers could
not save the industry from the slump.
According to European Automobile Manufacturers' Association or
ACEA, car sales in the 27-nation European Union fell 2.8% to 1.20
million units in June and 6.8% to 6.64 million units in the first
half of the year.
Among the major markets (France, Germany, Italy, the
Netherlands, Spain and U.K.), Germany, the Netherlands and U.K.
showed improvement. Car sales rose 2.9% in Germany to 296,722
units, 52.1% in the Netherlands to 76,813 units and 3.5% in the
U.K. to 189,514 units. Meanwhile, it declined 0.6% in France to
208,909 units, 24.4% in Italy to 128,388 units and 12.1% in Spain
to 73,258 units.
), the largest car manufacturer in the continent, posted a 2.8%
rise in sales to 286,109 units in June and a 1.5% fall to 1.59
million units in the first half of 2012.
Sales at PSA Peugeot Citroen ebbed 8.6% to 148,172 units in the
month and 13.9% to 808,660 vehicles in the period under study. The
decline prompted the company to announce 8,000 job cuts and a plant
shutdown last week.
Among the U.S. automakers,
General Motors Co.
) posted an 8.8% fall in sales to 107,160 cars in June, translating
into a 10.8% decline to 560,934 units in the 2012-first half.
Meanwhile, sales at
Ford Motor Co.
) plunged 16% to 124,200 cars in the month and 9.6% to 733,900 cars
in the period under review.
Automakers are still concerned about car sales in Europe in the
near term due to the continuous negative impact from the debt
crisis. ACEA has projected a 7% fall in sales, hitting a 17-year
low, for 2012 in the continent.
Last month, light vehicle sales in the U.S. showed a marked
recovery approaching the pre-recession level amidst weak labor
market and dipping consumer confidence. According to Autodata
Corp., seasonally adjusted annual rate (SAAR) during the month was
14.1 million vehicles, up 22% from 11.6 million vehicles in June
last year and close to 16.1 million vehicles in 2007 before the
economy was hit by recession. With this, the U.S. auto industry
also completed the best first half of the year since 2008.
The key factors that drove auto sales in the U.S. include lower
gas prices, low interest rates and above all strong pent-up demand.
Besides, merchandising promotions (such as zero-interest loan) and
price incentives ahead of Independence Day also enticed consumers
to buy new vehicles. Most of the major automakers posted
double-digit rise in sales.
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
(VLKAY): ETF Research Reports
To read this article on Zacks.com click here.