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New car registrations in EU fall 10 per cent in first-quarter

Except for the UK, all major European car markets posted double-digit percentage declines.

New car registrations in the European Union (EU) as a whole declined by 10 per cent compared to the same period a year ago, according to the European Automobile Manufacturers Association (ACEA).

During the quarter, car sales fell by 13 per cent in Germany, 12 per cent in Spain, and 15 per cent in France. New car sales in Cyprus slumped 59 per cent in March 2013, compared to March 2012.

Except for the UK, all major European car markets reported double-digit percentage declines during the quarter.

Volkswagen (VW) sales in the EU declined 8 per cent in the first-quarter, while General Motors (GM) posted a 13 per cent sales decline. Car sales of PSA Peugeot Citroën fell 15 per cent, while Toyota and Ford sales declined by 18 per cent and 20 per cent respectively. However, sales of BMW and Daimler cars remained flat.

Max Warburton at Bernstein Research asked in a recent note: “What is going on in Germany? How can it be so bad when employment and economic growth remain solid? Consumer confidence driven by euro-related concerns seems to be the main factor, with retail demand, as opposed to corporate car buying, in free fall.”

BMW, Audi, owned by VW, and Daimler’s Mercedes-Benz rebounded strongly from the 2008 crisis due to demand from China and other emerging markets.

Warburton told the Financial Times: “The evidence is building that we are at the end of the cycle for German auto earnings . . . With growth slowing, mix [of high versus low-margin models] worsening and spending rising, earnings are going sideways at best for the foreseeable future.”

Christian Klingler, board member for sales at Volkswagen cautioned last week said that “the data for March clearly show that the markets are becoming even more difficult”.

Volkswagen is forecasting flat earnings for 2013. Meanwhile, Daimler expects an operating profit in the first quarter to be very clearly be below the level of the fourth quarter.