With Germany affected by the economic crisis, Europe’s auto sales saw its biggest decline in six months in August.
Last month auto sales dropped 8.5% to 722,483 units compared with 789,458 units over the same period last year. From January to August sales decreased 6.6% to 8.59 million units. Ford reported a 29% loss in August, Fiat and GM each with 18%, the biggest decline since a 9.2% drop in February. Germany, the country which helped offset declines in the other markets, saw its sales drop 4.7%.
“We’ll probably see a continued weakness in southern Europe and in addition to that an accelerated weakness in France and Germany,” said Arndt Ellinghorst, a London-based analyst at Credit Suisse Group AG.
Auto sales in Italy dropped 20%, in France 11%, Spain saw an increase of 3.4% and so did the UK with 0.1%. Analysts predict that car sales will drop 9% by the end of this year in Europe and 3% next year, expecting a recovery beginning with 2014. The last month of decline have pushed GM’s Opel and Peugeot into seriously considering closing the French and German car-plant in decades.
Even with the announced plant closures, excess supply in Europe will only be reduced by a fraction. Analysts predict that by the end of this year overcapacity in the market may more than double reaching 2 million vehicles.