Auto Sales in the EU Down in May to a 20-Year Low image

Auto sales in the EU dropped to a 20-year low in May as increased unemployment in Europe led to a dramatic sales fall at Renault, GM and PSA Peugeot Citroen.

Registrations in the EU fell 5.9% to 1.04 million units, compared with 1.11 million units in 2012, accounting for the lowest level for May since 1993, according to ACEA. Sales last month dropped 5.9% to 1.08 million vehicles. The unemployment level continued to increase, reaching a record 12.2% in April, affecting auto sales.

“Nobody’s buying cars,” and there’s “no reason to be optimistic,” as the sales increase the previous month was because of a calendar effect, Jens Schattner, a Frankfurt-based analyst at Macquarie Group.

Analysts predict that in 2013 the auto market in Europe will shrink for the 6th consecutive year, and a slight recovery is expected in the final quarter. Peugeot’s sales in May dropped 13%, Renault fell 10% and GM and Fiat both reported a drop of 11%. Registrations in Europe for the first five months of the year dropped 6.8% to 5.26 million vehicles and in May four of the biggest markets in Europe shrank, with Germany down 9.9%, France 10%, Italy 8% and Spain 2.6%, while the UK was up 11%.

Dealerships in Germany have reduced prices by around 11.9% in May, compared with 11.6% in 2012, with Opel increasing its discount to 15.2%, from 12% in 2012, Fiat offering price cuts of 13.5%, from 12% last year, and Peugeot, Renault and Citroen’s price cuts in Germany reaching 13.3%.

Last month GM’s sales were taken down by a 23% drop at Chevrolet and a 8.4% fall at Opel and Vauxhall. Ford fell 0.5%, VW was down 2.8%, with Audi dropping 3.9%, Daimler increased 0.5%, thanks to Mercedes-Benz which went up 2.6%. BMW fell 6.6%, with BMW brand down 7.3% and Mini small-car unit down 3.4%.

Source: Bloomberg