The steep drop in auto sales has begun to spread from southern Europe to the north, including Germany, the region’s biggest auto market.
This year so far auto sales have dropped 10% in Germany, 14.8% in Sweden and 30% in the Netherlands. Britain was the only market to offer a glimpse of hope with sales up 7.9% in February, the highest level since 2008. Last year new vehicle sales in Europe have fallen to a 17-year low as disposable incomes have been shrank by increasing prices, government austerity measures and subdued wages.
Analysts are optimistic about the auto industry in Germany, as they predict that economy here will increase this quarter, wages will rise and the unemployment will continue to drop. Still, consumers in northern Europe will remain cautions when it comes to big purchases.
“The problem is the German mentality; we want security, so if we’re concerned something bad might be around the corner, we’d prefer to be cautious and save up rather than spend,” said Christian Giebler, salesman at a Peugeot showroom in Berlin. “At the end of the day, our caution just leaves the economy kaput.”
Fiat CEO Sergio Marchionne said this month at the Geneva Motor Show that mass-market manufacturers have lost in 2012 about $7 billion in Europe, therefore many of them chose to cut production in the region to stem losses.