Auto Sales in Europe Reach 20-Year Low Due to Unemployment image

Auto sales in Europe reached a 20-year low as the high level of unemployment affected automakers’ sales.

In June registrations dropped 6.3% to 1.18 million, compared with 1.25 million vehicles in 2012, according to ACEA. Sales during the first half of the year slid 6.7% to 6.44 million units. The level reached in June was the lowest for this month since 1996 and the first-half number was the smallest since 1993, according to Quynh-Nhu Huynh, ACEA’s economics director.

In May the unemployment level was 12.2% in the euro area and this level is expected to have extended throughout the entire second quarter. Peugeot and Renault executives reiterated their forecasts that new vehicle registrations in Europe will drop 5% this year, accounting for the sixth consecutive year of falls.

“It’s still a weak car market, and I don’t think that it will get better in the very near future,” Sascha Gommel, a Frankfurt-based analyst at Commerzbank AG, said by phone. “I wouldn’t expect a recovery in the second half, but rather a stabilization at a low level.”

In June deliveries in western Europe dropped 6.2% to 1.11 million units and 6.6% to 6.06 million vehicles during the first six months of the year. The five biggest auto markets in Europe saw sales going down in June, with Germany, the largest market, falling 4.7% and 8.4% in France. The UK saw an increase of 13%.

“By any standards, the region remains a dreadful zone for most manufacturers,” Carlos Da Silva, a Paris-based analyst at IHS Automotive consulting company.

Source: Bloomberg