France new car sales down again in June 0.9% Y/Y image

French new car registrations fell 0.9 percent in June to 208,225 vehicles. Taking account of one extra working day this June, however, the annual decline was 5.6 percent, the country’s CCFA auto manufacturing association said in a statement on Monday.

The association said sales in the six months to June 30 fell 14% to 1.23 million vehicles. In the first five months of the year, registrations were down 17%.

The Peugeot and Citroen brands’ combined car sales fell 9.5 percent to 63,551, while domestic rival Renault recorded a 9.5 percent gain to 50,018 cars, thanks to a surge of business for its no-frills Dacia brand. Dacia accounted for 9,710 new registrations out of the group’s 50,018 total.

The continued contraction in European auto demand, with volume auto makers exposed to southern Europe bearing the brunt of the drop off in demand for new cars, is intensifying pressure on Peugeot to address the lack of competitiveness of its French factories, some of which are working at below 50 percent capacity.

Europe’s second-biggest automaker is looking for ways to make more cost savings this year and preparing to shut down one of its two Paris plants, union officials said on June 28.

“The decisions that you could take would undoubtedly have consequences on the entire car industry and especially outsourcing,” Montebourg said in a letter addressed to Peugeot Chief Executive Philippe Varin.

“I would like as a result that the PSA’s management makes its intentions known as quickly as possible.”

French statistics agency Insee said Tuesday that France’s economy will grow only slightly this year, unemployment will rise above 10% and consumer spending power will fall.

Exports are expected to accelerate somewhat under the effect of renewed world growth and the previous depreciation of the euro. Domestic demand should also pick up moderately.
The Bank of France last week cut its estimate for French growth, saying the eurozone’s second-biggest economy would now likely contract by 0.1 percent in the second quarter.