European auto sector hits 17-year low, Renault cuts jobs
PARIS (AFP) – European auto sales plunged to their lowest point in 17 years in 2012, trade data revealed Wednesday after Renault announced the latest job cuts to hit the beleaguered sector.
New car registrations in the European Union fell by 8.2 per cent from their 2011 level to 12.05 million units last year, the European Automobile Manufacturers’ Association said.
Sales in December fell for the 15th month in a row by 16.3 per cent on a 12-month basis, even slipping slightly in Germany despite the global strength of top German brands.
French automakers in particular are being hard hit with Renault announcing 7,500 job cuts late on Tuesday.
PSA Peugeot Citroen, the second-biggest carmaker in Europe after the booming German VW group, has just been rescued by the state. The group is restructuring with 8,000 job cuts and targets development abroad after a government report said its strategy had missed the bus of globalisation.
And on Wednesday French car parts maker Faurecia reported weak results causing its shares to plunge.
By contrast the VW group has reported record global sales for 2012 with a rise of 11.0 per cent to 9.07 million units and aspires to being the biggest manufacturer globally, ahead of Japanese Toyota, by 2018. German Daimler said at the Detroit auto show this week that it is on track to be the world’s top luxury carmaker by the end of the decade.
The second-biggest manufacturer globally is General Motors, which struck a strategic partnership with PSA this year, but GM’s sales across the whole of Europe fell by 8.2 per cent last year, the US group said in Detroit.
These companies, and European manufacturers in general, are looking to growth in emerging markets to compensate for what they expect to be a lasting weaker trend in Europe, but these markets are also the home base for new competitors notably in China.
The European trade association said in its report on the European market: “Demand for new cars reached the lowest level recorded since 1995, totalling 12,053,904 units” in 2012.
Last year’s 8.2 per cent shrinkage was the worst since a downturn of 16.9 per cent in 1993, the association said.
The trend was aggravated by exceptionally bad figures for December in debt-stricken Europe.
“In December, new car registrations declined by a sharp 16.3 per cent in the EU, continuing a downward trend commenced 15 months ago. The decline is the steepest recorded in a month of December since 2008,” the statement said.
With the eurozone struggling to cope with the tax rises and cuts in state spending imposed to correct its debt crisis, businesses and consumers have cut down their spending on vehicles.