Auto sales slump in debt-hit eurozone

HispanicBusiness - European car sales slumped in June on sharp falls in nations at the centre of the eurozone debt crisis, data released Tuesday showed. New registrations in Italy dropped by 24.2 per cent year-on-year in June and by 12.1 per cent in Spain, the Brussels-based European Automobile Manufacturers' Association said.

The declines were even more dramatic in the smaller debt-hit eurozone states.

While new registrations tumbled by more than 40 per cent in Ireland and Greece, the ACEA said sales in Portugal shrunk by 37 per cent.

All five countries have been hit by a sharp economic downturn and high unemployment after launching tough austerity measures to cut back high debt-and-deficit levels.

This resulted in total new registrations in the European Union dropping by 2.8 per cent in June, the ACEA said, continuing the trend that began in October.

In the first half of the year, total EU sales contracted by 6.8 per cent when compared to the same period last year.

The release of the latest ACEA data came against the backdrop of signs that European carmakers have been hit by the debt crisis, which is now into its third year.

France's PSA Peugeot Citroen - Europe's second largest carmaker - announced last week a major restructuring plan including big job cuts and the closure of a factory as it faced up to declining sales.

The ACEA figures showed new registrations for the group falling 8.6 per cent in June. Its rival Renault suffered a 3.8-per-cent fall.

Likewise, new registrations for Italy's Fiat group contracted by 18 per cent.

General Motors Europe operations also suffered with sales of its loss-making Opel/Vauxhall unit slumping 12.2 per cent last month amid

concerns that the German-based Opel group could be facing a major shakeout to help boost revenue.

This follows last Thursday's surprise announcement by Detroit-based GM that the chief of its European operations, Karl-Friedrich Stracke, was resigning.

The company is expected to announce Tuesday that Thomas Sedran, the board member responsible for corporate strategy, will succeed Stracke.

The overall decline in European new car registrations came despite strong gains in Europe's biggest car markets in Germany and Britain.

While Germany rose 2.9 per cent in June compared with the same month last year, sales in Britain climbed by 3.5 per cent. In the Netherlands, registrations raced ahead by 52.1 per cent.

Europe's biggest carmaker, German-based Volkswagen bucked the general downward trend, reporting a 2.8-per-cent rise in June registrations. However, registrations dropped 1.5 per cent in the first six months of the year.