Kia, Chevy win despite Europe's January sales slide
New-car sales were expected to get off to a tough start this year, so it was no surprise when in western European volume fell 9 percent last month to 933,333 units, according to LMC Automotive.
The only brands that were able to defy this downturn were Chevrolet and Kia, which both made significant gains in three of Europe's four biggest markets, with the exception being France, where overall sales fell hard last month.
In January, South Korea's Kia managed to increase sales 132 percent in Germany, Europe's biggest market, 43 percent in Italy and 38 percent in the UK.
In the same period, sales of Chevy's Korea-built models rose 120 percent in the UK, 23 percent in Italy and 19 percent in Germany.
Europe's best-selling brand, Volkswagen, was alone in managing a big sales gain in France, up 27 percent compared with January 2011. The German automaker also increased UK sales by 5 percent, but sales slipped 2 percent in Germany.
Of the top five western European markets, only Spain showed a modest gain in sales, with a rise of 3 percent to 54,961 units. But this is scant relief for a market that has seen its volumes halve since a peak of 1.62 million units in 2007 to just 808,000 units last year.
In the UK, sales were flat at 128,853 units, while Germany's sales were flat at 210,195 units.
In Italy, sales dropped almost 17 percent to 137,119 units, while in France the volume slipped 21 percent to 147,143 units. The slump is partly to a comparison with inflated January 2011 sales. About 30,000 registrations were carried over to January 2011 from the previous year's government-funded car scrapping program.
While there were small pockets of growth in tiny markets such as Finland, Ireland, Luxembourg and Norway, this did little to help Europe, which began the new year with a seasonally adjusted annualized rate (SAAR) of just 11 million units a year, "weaker than anything seen in 2011, and re‐affirming our forecast that this year will be an even tougher one for the industry," LMC said in a release.
The group forecasts that 2012 western European sales will decline 6 percent to 12.05 million units from 12.8 million in 2011.
South Korean carmakers
In addition to offering fresh products with appealing design and fuel-sipping engines, South Korean automakers are also benefiting from a free-trade agreement with the EU.
The agreement already has cut custom duties for engines with a displacement below 1.5-liters from 10 percent to 8.3 percent. The duty drops to 6.6 percent in July and will be phased out by 2017. For bigger engines, the duty was lowered to 7 percent last year and will decline to 4 percent in July.
Since such duties are applied before adding sales and added-value taxes, a 1 percent decline in duty translates into an almost 1 percent decline in retail price. And lower sticker prices could become an increasingly relevant factor in Europe as consumers tighten their belts because of hard economic times.
You can reach Luca Ciferri at email@example.com.