French New Car Sales Down 7% in July Due to Weak Economy image

Sales of new cars in France continued to decrease in July, as customers are worried by the economic crisis and the rising jobless rates.

The economic crisis made the entire French market decrease by 7% in July, although it had two extra working days compared to July 2011. The French automakers’ association announced that even if it is to take into consideration these two days the market was down 16% compared to the same period last year. From January to July new car sales were down 14% compared to the first half of 2011.

PSA Peugeot Citroen’s sales were down 9.9% in July, and 20% in the first half of the year. Renault saw sales decrease 11%, and 18% for the first seven months. Due to weak sales that affected not only France, but the majority of European markets, car makers decided to slow production in order to avoid unnecessary build-up of expensive stocks. Therefore 40% of the facilities in France are operating uneconomically as production doesn’t offset fixed costs.

Auto makers have already revised their targets and projections set at the beginning of the year, expecting the French market to contract by 10% by the end of the year.