Europe: Most of the automobile companies cautious; sales down image

In Europe most of the automobile companies are cautious. Unemployment in the eurozone rose by 169,000 in March, official figures showed Wednesday, taking the rate up to 10.9 percent — its highest level since the euro was launched in 1999.

In March, demand for new cars in the EU* was negative for the sixth consecutive month, with a decline of 7.0% compared to March last year. From January to March, contrasting performance across countries led to an overall 7.7% drop.

Most of the automobile companies like PSA Peugeot Citroen, Fiat or Renault are in the red area.
PSA Peugeot Citroen, France’s biggest carmaker, forecast a tough second quarter, saying demand continued to sag in its domestic and core southern European markets, sending first-quarter sales down 7 percent.

Renault says a worse-than-anticipated slump in car markets in France and across Europe caused overall sales to fall 8.6 percent in the first quarter to €9.5 billion ($12.6 billion).

Also, Fiat’s European operations lost €207 million. Fiat’s car registrations in the region plunged 26 percent to 81,469 units in April.

CEO Marchionne said that future investments in Italy beyond those already announced would remain on hold until the market improves, and the company said Fiat’s domestic market is expected to register the lowest volumes since 1983 this year.

Premium automobile companies like Bayerische Motoren Werke AG (BMW) or Mercedes are also cautious even if some of them announced high earnings in Q1.

We are cautiously optimistic, but the economic risks remain,” BMW Chief Financial Officer Friedrich Eichiner said.

First-quarter revenue was up 14% at EUR18.29 billion as BMW notched up an 11% rise in sales to 425,500 cars, a new quarterly sales record helped by the recent launch of new versions of the high-volume BMW 1-series and 5-series models as well as continued strong demand for the X3 and X5 sports-utility-vehicles.

Automaker Daimler AG says net profit rose 20 percent to (EURO)1.42 billion ($1.88 billion) in the first quarter despite a slip in earnings at its key Mercedes luxury car business.

Sales of Mercedes hit a record 338,300 units, with European and US markets performing particularly well.