By on July 17, 2013


Though Ford, VAG’s Seat brand, and Renault’s low-cost Dacia posted gains, overall car and light truck sales in June in Europe were down 6.3% compared to June of 2012, weighed down by declining sales at VW, Opel, Fiat and PSA. According to Automotive News, only 1.18 million new vehicles were registered in the EU and EFTA, the lowest they’ve been in two decades.


VAG sales overall were down 4.4%, with Audi showing the biggest decline at 8.9%. VW branded car sales went down 6.6% and Skoda was off by almost 7%. PSA (Peugeot-Citroen) was down 11%, while Fiat overall sales were down 13.6% with the Fiat brand itself down 6%. GM did not have a good month in Europe, with overall sales down 9.9%. Opel and Vauxhall were down 7.2% and Chevrolet was down 23%. BMW was off by 7.7%. On the positive side were Renault at +0.9%, with Dacia’s 16.4% jump more than balancing a 3.3% drop for Renault branded cars. Mercedes posted a modest 2% gain, Seat was up 11 percent and Ford sales increased by 7%.

Some analysts see a dim light at the end of a dark tunnel. Commerzbank’s Sascha Gommel said, “It’s still a weak car market, and I don’t think that it will get better in the very near future. I wouldn’t expect a recovery in the second half, but rather a stabilization at a low level.”

Others were not as optimistic. Renault and PSA executives repeated projections that showed an overall drop of 5% for the full year, which would make 2013 the sixth year in a row with declining sales in Europe. Renault-Nissan CEO Carlos Ghosn said earlier this month that the European car market will probably shrink some more in 2014 and 2015. Fiat head Sergio Marchionne doesn’t expect Europe to improve “for years”. Even BMW CEO Norbert Reithofer, who is a little more optimistic, said recently that European markets would not start to improve until the second half of 2014

By country, Germany was down 4.7%, France was down 8.4% and Italy down 5.5% as unemployment and austerity measures have their impact. The UK bucked the trend, with its 16th month in a row of gains, up 13.4%.

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35 Comments on “European Car Registrations Fall To Lowest Level In 20 Years...”

  • avatar

    Demographics aside near $10/gallon fuel could be a reason.

    • 0 avatar

      They have had expensive petrol/diesel for quite some time.

      Interesting how Skoda, VW’s budget brand, was down significantly. I am also surprised by Audi since they had been reported as being the “hot” brand. Maybe that is just in China.
      I wonder what is driving Ford’s increase in sales since they haven`t launched any new low cost cars (Fiesta, Ka or something similar).

      • 0 avatar

        Skoda is in the process of launching a number of new models, the changeover appears to be hurting them at the moment. If this theory is correct, they should recover strongly in the second half.

    • 0 avatar

      My cousins in Portugal and Germany have told me that it is cheaper for them to rent when they need a car than it is to own one full time.

  • avatar
    Big Al from Oz

    This is a real pity the shape the Eurozone is in.

    I do think there will be a standard of living adjustment coming. So the current trend will be around for some time to come.

    Like running a home, if you consistently live on 5% more than you are earning for years on end, what will the end result be? Europe, Japan, US etc.

    It’s not just a Euro problem either, this impacts the globe. Maybe our politicians should start to realise that the taxes they collect should only be spent on the people.

    Taxes should be for infrastructure development, military, education, health etc. Not supporting businesses and unions and who ever lobbies and donates to them. The West, not just Europe has to stop subsidising industry.

    This corporate welfare model did work relatively well 30+ years ago, when the only real competition was the industrialised world or as it is also know the OECD. Now industrialised countries are being created in large numbers. This is our competition, not each other in the OECD.

    The past 30 years of subsidising our standard of living and not being competitive has allowed massive waste and inefficiency to take hold. This has lead to massive debts.

    Europe is doomed. China doesn’t have the resources to pull them out. No other country can either, there isn’t enough money. If the EU goes down, so will everyone else. Their collective GDP is comparable to the US.

    • 0 avatar

      While I wouldn’t go so far as to agree that “Europe is doomed”, the welfare model in general, is running out of runway. I’m not talking about assistance for those most needy – I’m talking about the redistribution model that most governments use. Fact is you can call it what you want, but all of these government dollars being dolled out are nothing more than payola to keep the votes rolling in.

      Unfortunately, at some point you reach a critical mass where there are too many people and too many organizations dependent on these dollars, their needs always outstrip the ability to pay, and too many leeches enter the system and become parasitic to the point where it kills the host.

      Again I’m talking about everything from corporate welfare to tax credits for housing here in the US to general welfare programs. They all lead to a vicious cycle of dependency and ultimately the number of people paying into the system versus those leeching off of the system hits a tipping point.

      Europe and the US have suffered not a liquidity problem, but a debt overhang issue that then became a liquidity problem once the lenders stopped lending. It was at that moment everyone realized what a ponzi scheme the entire economy was/is – that it was/is being propped up by cheap money and easy credit. Take away the koolaid and force debts to be paid and everything comes to a screeching halt.

      Take a look at any abandoned condo development in Florida or in parts of southern Spain and you’ll see how the misallocation of easy money helped to fuel this. Don’t take my comments as saying that credit is a bad thing – but it must be allocated efficiently and more importantly, in the absence of too many government incentives. Once government incentivizes a particular market (ie: housing) the result is a distortion in that market. We’re seeing the same thing with student loans, where the incentivization of education, combined with strict non-discharge bankruptcy laws have turned higher education into a ball and chain for many millions of 20-somethings who have been sold a bill of goods that a BA/MA is essential ‘for everyone’. Just like owning a home was essential ‘for everyone’.

      /rant. My apologies for the long-winded response.

      • 0 avatar
        Big Al from Oz

        It’s not a rant. I do believe in what you are stating. But just cutting out corporate welfare and farm subsidies across Europe, US and Japan first will make a big impact.

        I do consider any subsidy that favours a particular market a corporate welfare ie, housing—construction industry.

        We need infrastructure, education, health and military. I think governments must go back to supplying the basics for a country. Anything more than that is really not their business.

        Even welfare can be self funded like we have in Australia with superannuation ie 12% of our pay packet has to be placed into a private investment fund not like GM and other companies who promised unrealistic pensions to the UAW etc.

        Government jobs must go back to a lower wage than private industry jobs etc. In Europe government workers in many cases earn more than the person working for a private company.

      • 0 avatar

        No apology needed. Clear and plainly stated economic explanations are all too rare. Much appreciated.

  • avatar

    “the welfare model in general, is running out of runway”

    I don’t know if you’ve noticed, but unregulated free-market capitalism hasn’t exactly benefited the average American for, oh, the quarter century or so.

    • 0 avatar
      Big Al from Oz

      The US doesn’t have a free market, its far from it. How many 100s of billions of dollars are spent every year on farmers?

      How much does/did Detroit get in free loans and bailouts, including the UAW pension. What about Solyndra and all the other subsidised industries.

      Using tax dollars to make a country competitive sort of defeats itself eventually.

      • 0 avatar

        @Big Al –

        Thanks, that is essentially my point. The problem is finding a balance between nurturing industries and supporting common goals/societal improvements and then avoiding the inevitable reliance on those artificial supports moving forward.

        We’ve done it for decades now – agriculture got a huge boost during the Great Depression, but has kept at it. Europe has a similar problem whereby the European Agricultural subsidies make up the vast majority of the EU and various state budgets. The subsidies have grown every year.

        In the US, we did it to support housing after WWII, but then the perks kept growing: tax credits, development of Fannie Mae/Freddy Mac, etc. Let’s not even talk of the defense industry. If you want a good example of how a bureaucracy becomes entrenched and how the leeches come to roost, look no further than NASA, who was put together for a stated purpose in 1957 and then grew into a massive bureaucracy because it was the only way to guarantee funding. Study the development of the shuttle between 1971-1979 for a great case study in how to guarantee dollars flow to a particular program, congressional district and contractor.

        Again, we can do great things – the problem is how to tame the beast and keep it in check. We’ve demonstrated a great lack of willingness to keep the leviathan in check.

  • avatar

    With recent changes (exch. rate, protests) in Brazil, I wonder if we are going to start seeing a decline in car sales as well. Marcelo, care to comment?

    • 0 avatar

      Hey Robstar!

      Situation is very fluid. Nobody really knows where we’re going. Some people are trying to open Pandora´s box and put everything on the table again. Others are trying to steady the ship. I hope we don’t throw the baby out with the dirty water as a lot of good things have been reached.

      My truth on the matters is that we’re experiencing a bout of inflation. With the valuation of the dollar and China buying slightly less, some of the things that held up the economic policy until now have been changed. So some new measures are needed. The gov has tightened up credit. Rain is falling again (crucial for energy). Harvests are in holding food prices. In a way the protests were a very middle class thing as the middle class has been more affected by inflation and is more aware of the continuing corruption scandals. The poor, depending on how you look at it, are either in the guv’s pockets due to large scale social programs or never better off because such programs has widened up their opportunities.

      As to cars, last month did see a fall of 5% IIRC from the previous month, but still better than last year (record year). Can’t really say for sure as many important and large volume cars have been or are being launched. The credit crunch could kill the market. But there are still good number of people improving their lot, employment has not been hit yet. If that holds the car market shouldn’t really be that affected.

      Next year is the World Cup and elections. Lots of money circulating. If the gov can get a handle on inflation the day of reckoning has been put off until 2015. But then of course there are the Olympics in 2016…

      What Brazil needs is some more controlled spending and a real tax reform. The political reforms people are talking of is just a side show in my opinion. Let’s see how it goes.

      • 0 avatar
        Big Al from Oz

        @Marcelo de Vasconcellos
        Last Christmas I had the privilege to chat to one of your Vice Counsels. We discussed the issue confronting Brasil.

        She said that their are layers of inefficient taxation that stifles investment, plus protective barriers across many industries that also stifles investment.

        I would like to see Brasil rise and become more successful, but from what I see on the news there is too much social unrest.

        Brazil could generate a much higher standard of living for all in the country. It has many resources and a population base to create industry that could supply and help develop South America.

        But, Brasil has made a lot of progress over the recent past and appears to have stagnated. I do hope the politicians can make the changes to get your country going well again. The Indians have realised that they need to liberalise their market more to advance.

    • 0 avatar

      Until Europe decides HOW to pay back their debt – that is, with what currency will they use – their economies will be slowly tanking, then slowly rebounding. Eventually Europe has to figure out how to get out of their currency mess.

      The Euro isn’t working and that’s the biggest problem here.

      We can’t lump all the European economies into one average when we discuss the strengths or weaknesses of the auto market continent-wise. Whats happening in Sweden isn’t whats happening in Italy. Over-regulated economies in Spain or France isn’t found in Poland or Latvia. You can’t just lump them all into one pot, then describe a cure or discover the problem.

      But that is exactly what the Euro does. It is the same currency regardless of nation. That is the problem.

      Let’s also look at the figure at the top of this discussion. It is a European average and then broken up by brands. It isn’t sales by nations broken up by brands. If it was, then this thread would be very different.

      Until Europe kills and replaces the Euro, this is the market the global auto manufacturers will find here in the future. That is why we are seeing them expanding into other parts of the world to earn their profits.

      • 0 avatar

        We can’t lump all the US economies into one average when we discuss the strengths or weaknesses of the auto market continent-wise. Whats happening in California isn’t whats happening in South Carolina. Over-regulated economies in Washington or Michigan isn’t found in Georgia or Tennessee. You can’t just lump them all into one pot, then describe a cure or discover the problem.

        But that is exactly what the dollar does. It is the same currency regardless of state. That is the problem.

  • avatar

    Denmark, probably the third-largest non-euro EFTA economy, has added 9 percent to its car sales year over year. Sweden, my personal favorite gaggle of dastardly socialists, is down nearly 10% in car sales year over year. But Sweden continues to outperform the rest of the eurozome by a wide margin in terms of economic growth, so I’m guessing that decline is due to structural factors. If you want more evidence of how the euro cripples fundamentally sound developed economies, try comparing the Republic of Ireland to the rest of the UK and try not to spit out your coffee/beer/hard liquour.

    • 0 avatar

      Keep in mind that Ireland, Spain, Italy and Greece have all grown over the past 20 years thanks to very cheap, very German money. The Scandanavian countries have traditionally done a good job of fiscal responsibility – the Club Med states not so much.

      Banking at its very best (sarcasm): socialize the risks, privatize the profits.

    • 0 avatar

      Exactly, it is the Euro that has linked disparate economies (Greece and Germany for example) and stopped countries adjusting to economic reality by devaluing. I am very surprised by the continued growth in the UK market and would have expected probably zero growth, which would still have been relatively good.

      • 0 avatar

        I was living in Spain during the transition to the Euro and had the pleasure (no sarcasm) of being there on January 1, 2002 when Euro notes and coins started circulating. Things weren’t as chaotic as many expected, and as a yank I appreciated the fact that the Euro was very close to parity with the USD$ at the time.

        That said, there was *immediate* price inflation, especially on my daily trips to the market where comparable prices jumped an easy 5% on day one of physical currency trading. The sentiment was echoed by friends and especially my then Spanish girlfriend’s mother.

        This was also in a town that was ground zero for the easy money inflows on the Mediterranean coast. The cost of everything jumped dramatically between 2000-2003 while living there, both due to the economic boom and the Euro introduction.

        Unfortunately, Spain’s growth was predicated on comparably lower prices than northern Europe along with cheap credit. Once pricing parity was reached, fiscal policy hamstrung by Berlin and cash flow limited by the fine bankers in Frankfurt, everything unraveled very quickly.

        You cannot have monetary union without fiscal union. The amount of sovereignty one would need to give up to permit fiscal union is nearly unthinkable at this point in time – especially after witnessing the EU response to the current financial crisis.

      • 0 avatar

        Its not the currency or Germany that destroyed the latin part of the EU, it was them realizing that they could borrow at Germany interest rates and live the good life (the quote about democracy being all great and good until the elected officials realize they can buy votes with thier constituants monies) and the persons, institutions that pushed these bonds assuming that Germany would clean up the bill. Greece, spain, Italy (it France that’s the biggest worry, it was thier insistance that Germany agree to the common currency as part of re-unification, so they to could live the good life on German interest rates). Germany (netherlands and austria as well I’m sure) are just happily patching the holes until such time that either the other countries fix themselves (and the hole the dug were massive, even devaluation, because of balance of payements, would just lead to hyper inflation, not more competitive economies) while giving thier economies time to adjust so they can just move to thier own shared currency again. But Germany is not going to fund Greece (which doesn’t even seem to be trying really, votes and all) forever, that’s like having a crackhead cousin, let the neo-nazi’s take over, don’t see greece ramping up its dormant industrial might anytime soon to take over the world.

        • 0 avatar

          (the quote about democracy being all great and good until the elected officials realize they can buy votes with their constituents’ monies)

          “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

          Alexander Fraser Tytler

          • 0 avatar

            Great quote. So true.

          • 0 avatar

            That’s why the smart people look out for themselves first, and hide as many of their assets as they can.

            For many people, keeping a very large stash of cash money on hand is the way to go since banks pay very little interest on deposits.

            And it also reduces the amount of tracking the government and the IRS can do on your personal wealth.

          • 0 avatar

            “..always to be followed by a dictatorship, then a monarchy.”

            So that old Imperial margarine ad was prescient?

            Probably the only brand they serve at Yale. Royal jelly.

          • 0 avatar

            The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
            Alexis de Tocqueville

            Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
            Alexis de Tocqueville

            Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.
            Alexis de Tocqueville

            I know of no country in which there is so little independence of mind and real freedom of discussion as in America.
            Alexis de Tocqueville


      • 0 avatar
        Big Al from Oz

        You also have to look and see where to economies were 30-40 years ago. Ireland, Portugal, Greece, Spain and even the Italians to a degree were almost middle income countries.

        They tried to expand to quickly with no reliable source of income. They can only blame themselves. The northerners can only blame themselves for not researching a country prior to giving them money.

        I would say the inevitable will occur and the Eurozone will fragment. Which will be good cut of the deadwood.

        The Germans are sort of lucky, re-unification gave them growth, plus it gave the Germans a perfect opportunity to restructure its economy. It did, look at the difference it makes.

  • avatar
    Jeff S

    @Big Al–I agree with you except on the Military. The US has overextended itself in the Military relm becoming the World’s police. Spending on Cold War Era type weapons and warehouses full of obsolete items that have never been used. President Eisenhower in his final address to the Nation warned the citizens of the US of the danger of a Military and Industrial complex. What was stricken from Eisenhower’s original speech was the danger of a Military, Industrial, and Political complex. Just as the British Empire was drained of funds from having a military presence over the globe, now it is America.

  • avatar

    Its becoming clearer and clearer who’s going to survive (once the dead weight is cut out) and thrive in the mainstream segment of Europe, VW, Ford and Nissan-Renault. Ford is #1 in UK, has always been considered a German company (by the Germans I worked with for long period of time and are close to passing Opel in Germany as well), imagine they do quite well in the other germanic (northern european countries as well). Renault will survive with Nissan (globala) and a concentration on low cost brands (Dacia and AV) and emerging markets. Fiat, will hand on because of Chryco and Ferarri and Maseratti, unless they are going to make Maseratti a M/AMG/RS class German competitor while moving Alfa to competing against phlebian german luxury, it along with Lancia are dear. PSA is dear (VW may have interest in taking Citreon, explained in comment while back), Opel (the losing ground to ford in Germany y/y while losing money hand over fist, GM has to ask how much longer???. But that could be alot longer, but when you build your premium midsize sedan to be 80% of its closest competitor (mondeo), things aren’t good, this was Pre-BK, but still how many $ billions can you toss down a black hole offset by the fact that we have no way of knowing how black that hole is because we have no idea how GM is accounting for Opel and thier contributions to the whole, is it accounting trickery to accomplish what Ford did by paying for it, capacity reduction?)

  • avatar

    Whenever people vote to steal from everyone else, people starve.
    Hows that parasitic socialist Dumocrazy working out for ya?
    Of course, starving the tax livestock out of their automobiles is the goal of the EU tax farm, sooo, Well Done!

    • 0 avatar

      The Euro-zone is considered to consist of Western Democracies. Hence, the majority voted for what they have. This is what the majority wanted; this is what the majority got.

      Ditto with the US and the course it’s on. Majority rules. Those who vote for it always get exactly what they deserve.

    • 0 avatar

      If there hasn’t been the unending money printing and no letup in government borrowing in US, things over there would be whole lot similar to the situation in EU.
      You can thank your gridlocked political system for its inability to legislate any austerity measures many of your politicians were calling for.
      Keynesianism is saving you these days.

      • 0 avatar

        We vote for what we want and what the majority voted for was this disarray and gridlock. Majority rules in America.

        There will never be austerity measures in the US! Even the majority who gave us our current political climate and gridlock can agree on that and would oppose that.

        The US will simply print more money, buy more of its own debt like we have been doing for the past 4+ years, and place even more people on food stamps to help[ them through the never-ending tough times.

        That’s why those who can, shelter and hide their assets from the tax collector.

        The US is hoping that all the illegal aliens in America will somehow step forward, pay all their fines and start paying taxes, in return for amnesty and a path to citizenship.

        But I’m not sure that will work since a large number of illegals is not interested in becoming an American citizen. They’re only interested in making money in the US and sending it home to their loved ones in their home country.

        • 0 avatar

          >Majority rules in America.>

          The Constitution is supposed to temper that.

          Few remember the Senate was set up to represent the STATES in the Federal scheme. Senators were elected by the legislatures of the states to represent state interests and to stop the transfer of power to the central Federal guv.

          When Senators became elected popularly, they no longer had the same interest in preserving state power and the relationship between the states and Fed guv changed markedly over time.

  • avatar
    Big Al from Oz

    @Jeff S,
    I’m not talking how the military money is spent, but the government has a duty to protect it’s people.

    The policing should be spent equally amongst all countries. So, every year the countries that want to form an Alliance, ie, NATO should sit at a table and hammer out what is to be accomplished, in mil speak, the mission.

    So if is going to cost one trillion dollars a year to maintain NATO as a whole and there are 1 billion people. Divide 1 billion into one trillion and that is what is levied on each country.

    That is fair.

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