Europe's new car market plummets toward 1993 lows
The western European auto market maintained its sharp descent towards levels last seen nearly 20 years ago as consumers worried about unemployment and euro zone austerity shunned car dealerships in October.
Industry data published on Friday showed that France incurred its 12th straight monthly decline in new car registrations, while demand in Spain continued to plummet.
Germany may have bucked the trend with an increase of half a percent, but once two extra working days in October are stripped out of the equation, its meagre growth transforms into a material decline.
Smoothing out calendar effects by looking at Germany's market over the past two months shows a market declining about 5.4 per cent in the period. "Currently there is no early indicator or other hard data pointing to an improvement in the next few months," said Ulrich Winzen, chief forecaster in Germany for auto industry consultant R.L. Polk.
He currently expects western European car sales will fall clearly below the 12 million mark both this year and next - a level generally not seen since 1986, with the exception of 1993 when there was a short, sharp drop to 11.3 million cars.
The extreme weakness is also starting to show up in the German car output, according to data published by the domestic auto industry. Production volumes dropped by 6 per cent last month to 446,100 vehicles as carmakers steered away from stockpiling inventories of unsold vehicles.
German brand Opel, a unit of General Motors, continued to struggle in its home market despite a new money-back guarantee in place since late September.
Sales fell 15 per cent during the first full month of the campaign, shaving Opel's market share in Germany to 6.1 per cent - a new low for this year. According to the Car think tank in Duisburg, demand for Opels in Germany has never been lower than in this year. While Germany nevertheless is holding up relatively well, given its largely resilient labour market and higher consumer confidence, car markets in structurally weak southern European economies continue to suffer heavily as more and more budget cuts, tax hikes and supplyside reforms are implemented. September's near 22 per cent slump in Spain came after the government raised value-added tax, applicable from September 1, as part of its fiscal consolidation programme.