Europe's weak economy catches up with VW as April car sales plunge
Europe's economic woes caught up with Volkswagen in April as monthly new-car sales at the region's biggest automaker fell 5.2 percent in a total market down 6.5 percent, as consumers tightened spending.
In previous months, Volkswagen had posted healthy sales gains in Europe, helped by a buoyant German home market and, according to rivals, aggressive pricing.
But last month, group sales at the automaker dropped to 261,571 in the 27-member EU states plus Switzerland, Norway and Iceland, industry association ACEA said on Wednesday.
Deliveries at the core VW brand fell 8.4 percent. Sales at VW's Spanish unit Seat were down 22.3 percent, while Audi had a 4.4 percent gain and Skoda's volume increased by 4.0 percent.
Despite the volume decline, VW Group's European market share grew by three percentage points to 24.7 percent because its sales fell less than the total market.
Last week, VW Group sales chief Christian Klingler said the automaker had revised downward its annual sales forecast as the company expects markets in western Europe to deteriorate further.
April registrations at Europe's second-largest automaker, PSA/Peugeot-Citroen, fell by just 0.2 percent with a 4.6 percent rise at Citroen outweighing a 4 percent drop at Peugeot. Renault Group sales dropped 15 percent.
There was more bad news for General Motors Co.'s Opel/Vauxhall unit, which is facing plant closures and job losses to restore profitability. The division's April sales decreased by 17 percent, a higher decline than Ford Motor Co. whose volume fell 8.3 percent and Fiat Group, whose sales were down by 11.3 percent.
Premium automakers BMW and Mercedes-Benz had sales gains, as did Korean brands Hyundai and Kia.
Europewide registrations fell 6.5 percent in April to 1.06 million vehicles from 1.13 million a year earlier, the seventh consecutive monthly decline. Four-month deliveries decreased 7.1 percent to 4.49 million cars.
German, UK grow but southern Europe battered
Growth in new-car sales of 2.9 percent in Germany in April and 3.3 percent in the UK failed to counter sales declines of 18 percent or more in the battered economies of Italy, Spain and Greece.
Sales in Italy plunged 18 percent, Spain plummeted 21.7 percent and Greece plummeted 57 percent. France dropped 1.9 percent.
"Some countries in southern Europe are experiencing a drop in new car registrations," BMW CEO Norbert Reithofer said Wednesday at the carmaker's annual meeting in Munich. "Uncertain consumers tend to buy fewer cars. In such a situation, we find it tough-going in the market just like everyone else."
Jonathon Poskitt, head of European sales forecasting at LMC Automotive in Oxford, England, said: "Germany is pretty much standing alone, and to some extent the UK, with problems elsewhere. Spain is not climbing out of its hole anytime soon, and the Italian market is also weighed down by pressures in the wider economy."
Poskitt said consumer confidence is being hit by the continuous negative news about the euro zone and high unemployment levels.
"The premium brands are still benefiting because their key market Germany is doing relatively well and they've got quite strong product lineups, while the non-premiums like Fiat are seeing ongoing pressure," he added.
"Germany's economy is still strong, which drives the car market," said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen in Germany. "Southern Europe will cause problems for the next three to five years because there will be less money available for some time."
PSA, BMW and Toyota are forecasting that the region's auto market will contract about 5 percent this year, the fifth consecutive annual decline, as the sovereign-debt crisis prompts consumers to rein in spending.
Gross domestic product in the 17-nation euro region stagnated in the latest quarter compared with the prior three months, the European Union's statistics office said on Tuesday, as German growth helped the euro area narrowly avoid its second recession in three years.
Bloomberg contributed to this report
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