New-car sales in Europe are expected to decline about 7 percent this year

Article by Christian Andrei, on March 24, 2012

There were predictions that European new-car sales will decline by 5-7% this year but the first two months have actually been worse. Industry association ACEA said that sales in February decreased by 9.2% to 923,381 in the EU in addition to Switzerland, Norway and Iceland compared with February 2011.

The drop in February was sharper than the 6.6% decline experienced in January. European sales in January and February 2012 are lower by 7.8% with 1.93 million units sold. This represents the loss of 164,000 customers for the period. There are only two mass-market brands that posted strong growth last February. Kia’s volume increased by 31.4% to 22,610 while Chevrolet sales grew by 17.3% to 15,248.

These two brands sell low-priced cars mostly built in South Korea. This begs the question of whether the eurozone crisis is creating a market where only cheap models attract buyers. This isn’t exactly true since Dacia (Renault's Romanian subsidiary that sells affordable cars that are far from being fancy) reported a 5.4% decline in sales to 17,684 in February. In addition, the three brands that posted the highest sales gains weren’t low-cost brands.

Lexus sales rose by 72% to 1,627 due to the CT 200h entry-premium hybrid car, which has a starting price of about 30,000 euros. Meanwhile, Land Rover's volume increased by 69.8% to 6,111 units. This was driven by the rising sales of the Evoque medium-premium SUV, which is priced from 38,000 euros.

Jeep sales had a 58.1% growth to 2,257, boosted by its priciest model, the 45,000-euro Grand Cherokee large-premium SUV, whose sales tripled in the month. In February, all the European volume brands incurred losses amid the declining performance of their home markets too.

Topics: europe, sales

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