Europe sees car market crisis

Europe sees car market crisis
# 08 October 2008 11:50 (UTC +04:00)
In seasonally adjusted annualized terms, the market fell to its lowest level in over a decade, at 12.75 million units/year. Compare this level with last year’s out-turn of 14.8 million units to see just how rapidly the market has shifted downwards, reported Puregreencars.
“The profile has now taken on some similar characteristics to the market downturn during the early 1990s economic recession,” J.D. Power said in a statement
This time will be different of course and, in some ways, may even have more troublesome elements with which to deal, for example, the debilitating impact of expensive or scarce credit for vehicle purchases.
German new-car sales fell 1.5 percent to 261,384. Sales in Germany held up well considering the economic context "but more bad news looks likely in the coming months," J.D. Power said.
The UK car market result was weak on any measure. The selling rate dipped, again, below 1.9 million units/year and there remains an expectation that things will get worse in the economy, probably over a 12 or 18 month period, before they get better.
Sales in Italy were not as bad as feared, given the sharp declines in recent months, but the slowdown continued nonetheless. Meanwhile, in Spain sales fell by over 30% year on year, though it is interesting to note that the selling rate was only a little lower than August, perhaps hinting that the market is finding its new lower level at a little under 1 million units/year.
The French market was, a little surprisingly, up by over 8% in September to 160,648 but this gain disappears once seasonal factors are taken into account.
Meanwhile, Russia’s GAZ Group announced yesterday it suspended Gazel production for a week October 6.
General Motors Corp.’s European unit unveiled plans to reduce production by about 40,000 vehicles by the end of the year as credit-market turmoil causes a drop in car sales, reports Bloomberg. The Adam Opel brand’s factory in Eisenach, Germany will start a three-week production halt next week, while the plant in Bochum, Germany, is completing a two-week closure.
Auto- industry sales in the region dropped 16 percent in August, the biggest monthly decline since 1999, with GM brands reporting an 18 percent drop. Competitors such as Ford Motor Co., Bayerische Motoren Werke AG and Daimler AG have been reducing production in recent weeks in response.
BMW, the world’s biggest luxury carmaker, outlined plans in August to scale back production by 20,000 vehicles, equal to 1.3 percent of its deliveries in 2007, and said on Oct. 2 that it may deepen the cutback. The company’s Leipzig, Germany, plant, where it makes the 1-Series compact, is halting work for four days at the end of this month as part of the reduction.

Stuttgart, Germany-based Daimler said today that worldwide sales at its main Mercedes-Benz Cars division in September fell 2 percent to 122,200 cars and sport-utility vehicles, with western European deliveries declining 3.3 percent and U.S. sales dropping 8.5 percent.