Car sales continue to drop in August in Europe

Article by Christian Andrei, on September 5, 2012

Mass-market brands suffered the most as the monthly new-car registrations in Germany, France and Italy had decreased once again in August. German sales in August declined by 4.7% to 226,500 registrations, according to preliminary data from the VDIK importers association. Meanwhile, the CCFA industry association said that sales in France fell 11% to 96,115 cars.

This is the tenth straight month that car sales decreased. Automotive think tank Promotor said that in Italy, sales fell by 20% to 56,447 units, a level that was last observed in 1964. This is actually the ninth straight double-digit drop in the market. In the first eight months, the new-car orders in Italy have dropped by 22% to 921,000. In the same period, its registrations have fallen by 20% to 981,000 units.

The decline in August forced Promotor to lower its prediction for the full year to 1.370 million units from the 1.379 million previously. This represents a drop in its outlook of over 1.4 million units at the end of June. In a statement last Monday, Jacques Bousquet, President of Italy's car industry association UNRAE, said that it will be hard to observe any recovery signs when there’s no intervention to help increase the purchasing power of families through tax reductions and a relaunching of consumption.

In August, Spanish car sales increased by 3.4% as customers hastened to complete purchases and surpass a sales tax hike in September. The market increase in Spain was its first in the past seven months. The ANFAC automakers' association said that about 10,000 consumers made purchases they would otherwise have made later.

This hints that later this year, the market would be more challenging. Spanish car dealers' association Faconauto said that September and October will be a "disaster.” A spokesman said that sales are likely to experience a steep drop unless automakers make even more significant discounts.

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