European car sales fall 6% in June

European passenger car registrations fell by 6.3 percent in June to a two-decade monthly low as the region's weak economy hurt demand at automakers including Volkswagen, Opel, Fiat and PSA/Peugeot-Citroen.

Bright spots were Ford Motor Co., whose volume was up nearly 7 percent, Renault's low-cost Dacia brand where sales rose 16.4 percent and Volkswagen Group's Seat brand, up nearly 11 percent.

Registrations in the EU and EFTA markets declined to 1.18 million vehicles in June from 1.25 million cars a year earlier, industry association ACEA said today in a statement.

The decline dampened hopes of a recovery in European sales but some industry watchers said there were signs that the market is stabilizing.

IHS Automotive's head of European light vehicles sales forecasts, Carlos Da Silva, said the June numbers confirmed a slowdown in the rate of decline evident since March/April. Sales have started to bottom out but were not yet starting to recover, he said in a statement.

Volumes in the second half are likely to continue to fall, but possibly at a slower rate and the region remains "a dreadful zone" for most manufacturers, Da Silva said.

Commerzbank analyst Sascha Gommel said: "It's still a weak car market, and I don't think that it will get better in the very near future. I wouldn't expect a recovery in the second half, but rather a stabilization at a low level."

First-half sales declined 6.7 percent to 6.44 million vehicles, the lowest since 1993.

VW, PSA, Fiat hit in June

The June figure was the lowest for the month since 1996, said Quynh-Nhu Huynh, the group's economics director. Most volume automakers saw volumes decline during the month.

Volkswagen Group posted a 4.4 percent fall in sales, with the biggest drop of 8.9 percent its Audi luxury brand. Sales at the core VW marque fell by 6.6 percent. Skoda's sales were down nearly 7 percent.

PSA's volume declined by almost 11 percent in June while Fiat Group posted a 13.6 percent fall with the core Fiat brand's sales down 6 percent.

General Motors Co.'s sales in Europe dropped 9.9 percent, dragged down by a 23 percent plunge at the Chevrolet brand. Sales at the Opel and Vauxhall marques declined 7.2 percent.

Sales at Renault, gained 0.9 percent as demand at its Dacia low-cost brand jumped 16 percent, offsetting a 3.3 percent drop in Renault brand volume.

Among luxury carmakers, Mercedes posted a 2 percent gain, powered by new models, while the BMW brand fell 7.7 percent.

5% fall forecast

Executives at PSA and Renault reiterated predictions this month that the region's car market will contract 5 percent this year in the sixth full-year drop.

Renault CEO Carlos Ghosn said on July 6 that the European car market will probably shrink further in 2014 and 2015 as rising joblessness continues to sap consumer demand.

BMW CEO Norbert Reithofer said in a newspaper interview on Tuesday that he did not expect a pick-up in western European markets until the middle of next year.

Sales by country

The German market, which resisted much of last year's slump, shrank 4.7 percent in June, while sales in France and Italy fell 8.4 and 5.5 percent respectively, as unemployment and austerity measures reduce consumer spending.

By contrast, UK sales remained robust, notching up a 16th straight month of gains with a 13.4 percent increase.

ACEA's Huynh said: "Even if there is a recovery in the second half of the year, it's hard to see how it could be strong enough to offset the bad results we've registered so far this year."

Jonathon Poskitt, a forecaster at LMC Automotive research company, said the seasonally adjusted annualized selling rate for western Europe "appears to be more solid" than the unadjusted numbers. Figures for June indicated 11.7 million registrations for the full year, "comfortably the best result so far" in 2013, Poskitt said in a report this month.

Bloomberg and Reuters contributed to this report