Europe car sales drop another gear

By Chris Reiter  |   2008-10-16  |     NEWSPAPER EDITION

EUROPEAN car sales fell for the fifth consecutive month in September, the longest stretch since 2005, as higher fuel prices and financial market turmoil reduced demand for General Motors Corp and Bayerische Motoren Werke AG models.

Registrations declined 8.2 percent to 1.3 million vehicles from 1.42 million a year earlier, the Brussels-based European Automobile Manufacturers' Association said yesterday. Nine-month sales fell 4.4 percent to 11.7 million vehicles, accelerating from a 3.9 percent drop in the eight months through August. GM and BMW were hurt the most as credit markets seized up, deterring drivers from buying cars. Crude oil prices at the end of September were 25 percent higher than a year earlier. The European Commission's index of consumer and executive sentiment last month fell to the lowest level in almost seven years.

"The situation's much worse than the numbers suggest," as carmakers face higher steel and energy costs, pressure to lower carbon-dioxide emissions and weaker prices for used cars coming off leases, said Christoph Stuermer, a Frankfurt-based analyst with the international forecasting firm Global Insight.

The nine-member Bloomberg Europe Autos Index, which has fallen 19 percent this year, declined as much as 1.7 percent yesterday, with Renault SA, Daimler AG and BMW falling by 3 percent or more.

Industry slide

Industry sales in western Europe, including the 15 countries that were members of the EU before May 2004 plus Iceland, Norway and Switzerland, slid 9.3 percent to 1.21 million vehicles, led by declines of 32 percent in Spain and 21 percent in the UK.

Deliveries in the 10 eastern European countries that have joined the EU since 2004 increased 7.8 percent to 93,275. The association's figures do not include deliveries in Russia.

"The drop in registrations confirms the aggravating market circumstances, as the fallout of the financial crisis hits auto manufacturers hard," the association said.