Europe slump continues as August car sales fall in major markets

New-car sales in Europe showed no sign of a hoped-for revival in August after registrations fell in Germany, France, Italy and Spain.

Registrations in Germany were down 6 percent to 214,044 units last month, the country's Federal Transport Agency said today. Eight-month German sales are down 7 percent to 1.97 million.

However, German industry observers remained optimistic that the worst is over.

Sales in Germany were almost flat last month when adjusted for one working day fewer than in August 2012, said Frankfurt-based Commerzbank analyst Sascha Gommel.

"There may be no turnaround yet but the German market keeps stabilizing," Gommel said, citing improving business confidence in Europe's No. 1 economy that could help underpin vehicle demand in the remainder of 2013.

Matthias Wissmann, chairman of the VDA German industry association, said domestic orders kept growing by 2 percent in August following a 3 percent gain in July.

France, Italy and Spain slump

Germany joined France, Italy and Spain in reporting monthly sales declines in August.

French sales were down 11 percent to 85,565 vehicles. In Italy, volume fell by 7 percent to 52,997. Spain's sales declined by 18 percent to 38,872.

August is a slow holiday month from which it is hard to extrapolate trends but there had been hopes that the slump in Europe's car sales was flattening out after some positive news in July.

German car sales were up 2 percent in July, thanks to higher premium auto sales and an extra working day. Italy's monthly drop of 2 percent in July was the smallest year-on-year since April 2011, while in France registrations rose by 1 percent, the first increase in almost two years, and Spain's July car sales increased 15 percent.

Critical months to come

Francois Roudier, spokesman for France's CCFA industry association, said September and October sales results will be critical. "August is always a thin month but this year it's particularly low," he told Reuters on Monday.

The CCFA maintained its full-year forecast of an 8 percent decline in the French market where sales for the first eight months are down 10 percent.

European car sales fell to a 20-year low in the first half and are in their fifth year of decline as consumers delay new purchases until the economy improves.

Reuters contributed to this report