Fragile European economy sees car sales fall for a seventh month

Brussels: Eur-opean car sales dropped for a seventh consecutive month, with Renault, Toyota and Fiat posting the biggest declines, as consumers tightened spending amid a weak economy.

Registrations fell 6.5 per cent in April to 1.06 million vehicles from 1.13 million a year earlier, the Brussels-based European Automobile Manufacturers Association, or ACEA, said yesterday in a statement. Four-month deliveries decreased 7.1 per cent to 4.49 million cars.

Toyota, Peugeot Citroen and Bayerische Motoren Werke are forecasting that the region's auto market will contract about five per cent this year, the fifth consecutive annual decline, as the sovereign-debt crisis prompts consumers to rein in spending.

Gross domestic product in the 17-nation euro region stagnated in the latest quarter compared with the prior three months, the European Union's statistics office said on Tuesday, as German growth helped the euro area narrowly avoid its second recession in three years.

"Consumer confidence is being hit by the continuous negative news about the Eurozone, and you've got very real factors like high unemployment levels that are hurting the car market," said Jonathon Poskitt, head of European sales forecasting at LMC Automotive in Oxford.

Key market

"The premium brands are still benefiting because their key market Germany is doing relatively well and they've got quite strong product line-ups, while the non-premiums like Fiat are seeing ongoing pressure."

Sales in Italy plunged 18 per cent, Spain plummeted 22 per cent and France dropped 1.9 per cent.

European automakers will continue to weaken if they're not allowed by governments in the region to restructure and cut jobs, Renault CEO Carlos Ghosn said at an automotive forum in New York.

Executives estimate over-capacity is about 20 per cent on the continent.

The end last year of a series of financial incentives from the French state, including scrapping premiums, has depressed sales in the country.

European sales by France-based Renault tumbled 15 per cent to 89,724 cars last month.

Fiat, the Italian carmaker that controls Chrysler, nearly doubled its loss before interest, taxes and one-time items in Europe in the first quarter to €207 million (Dh969.2 million). Fiat's April European sales dropped 11 per cent to 75,462 autos.

Toyota's sales declined 13 per cent to 41,259 cars. The Japanese company started producing Europe's first hybrid subcompact last month, and will introduce the image-boosting GT86 sports coupe in a bid to claw back market share in the region after sales plunged 41 per cent since 2007.

European sales at Volkswagen AG, the region's biggest carmaker, fell 5.2 per cent to 261,571 vehicles, while its Audi luxury brand rose 4.4 per cent.

Peugeot, Europe's second-biggest carmaker, announced plans in late February to team up with General Motors in a bid to turn around its loss-making operations. The French carmaker's sales in Europe fell 0.2 per cent to 132,466 vehicles.