“European sales are still very, very low”.
Car sales in Western Europe continued to rally in May, but overall market sales are still yet to get close to levels reached before the big slide began in 2008, so any current euphoria is misplaced.
Nevertheless, car sales rose 3.9 per cent in May to 1.06 million compared with 1.02 million in the same month last year, while for the year to date sales climbed 5.8 per cent to 5.42 million, according to the European Car Manufacturers Association.
Strong performances in May were racked up by Renault of France – up 16.4 per cent to 67,600, and its compatriot Peugeot-Citroen – up 4.2 per cent at 117,700. Both these companies benefitted from well received new models like the Renault Captur small SUV, and the Peugeot 308. Renault was also helped mightily by its cut-price subsidiary Dacia which raised sales 20 per cent to almost 26,000. GM Europe suffered from diving sales at Chevrolet – 80 per cent down at 2,400 – which has announced it will cease to operate here next year. But its Opel-Vauxhall brands held up well with sales up 3.9 per cent at 74,700. Ford Europe stumbled, with sales down 4.5 per cent at 76,900, although the five months performance showed a healthy 6.6 per cent gain at 393,400.
IHS Automotive analyst Carlos Da Silva said European consumers are starting to react to the end of bad news about the European economy. Many consumers find themselves with old cars, having put off buying replacements because of economic uncertainty. These are starting to come back into the market.
“The trend is positive, but anything otherwise would be a catastrophe. Just consider that today’s selling rate of the European market has still not gone back to its level of late 2008. Said differently, in sheer volume and by any standard, European sales are still very, very low,” Da Silva said.
According to Automotive Industry Data, sales in Western Europe peaked at 14.8 million in 2007, slid to 13.54 million in 2008 and last year were 11.55 million. Forecasts for this year point to perhaps a four per cent increase on 2013.
Da Silva also sad that many sales are being completed because huge discounting.
This can’t augur well for the bottom lines of the many loss-making mass car makers in Europe.
“The market is definitely riding a good wave, but this does not mean it has become unsinkable all off a sudden,” Da Silva said.