For the fourth consecutive year, full-year vehicle sales in Europe dropped 1.4 percent to 13.6 million units, pushed down by a 5.8 percent slide in December, according to Brussels-based industry group ACEA. Contributing factors to the decline were the drop in consumer confidence level as well as the unemployment which remained at record levels.
PSA/Peugeot-Citroen SA, Renault SA and Fiat S.p.A. were hit hard with the drop in sales. Four of the five largest markets in the region contracted, with Italy and Spain leading annual drops at 11 percent and 18 percent respectively.
For the eighth consecutive month, consumer confidence in Europe declined in December to the lowest level since August 2009. Unemployment remained at its highest rate since 1999, prior to the introduction of the euro currency.
Analyst Christoph Stuermer at IHS Automotive commented that all manufacturers that are landlocked in Europe will have "another very, very tough year" in 2012. He also predicted a 5 percent drop in European sales this year. He further stated that the "core" market of the French manufacturers is "under significant economic pressure," adding that it would not be fair to expect them "to swing their sales around when their core market has gone."
Renault and PSA, which are the biggest automakers in France, are reducing production capacity to lower inventories. Fiat CEO Sergio Marchionne mentioned earlier this month that the vehicle market in Europe may be flat until 2014, with Italian sales this year likely to be at less than 1.7 million vehicles, which is the lowest level since 1985.