Europe New-Car Sales Chase Light at End of Tunnel

PARIS – Europe’s new-car sales rose 5.0% in July and fell 5.0% in August, basically endorsing comments by executives at the Frankfurt auto show that the market seems to be bottoming out or as Renault-Nissan CEO Carlos Ghosn puts it, “The light at the end of the tunnel is now visible.’

Through August, the market was down 5.2%, according to ACEA, the European auto makers’ association.

“This is far from fantastic,” IHS Automotive forecast manager Carlos Da Silva says. “But one must keep in mind how fast sales were falling until not so far ago. At the end of the first quarter, Europe was down 9.7%.”

The U.K. remains the only major market to have increased vehicle deliveries in the first eight months, up 10.4%. Germany, the largest market, was down 6.6%; Spain, 3.6%; Italy, 9.0%; and France, 9.8%.

The leader board for the year reflects the bipolar condition of the current market. Renault’s low-cost Dacia subsidiary saw sales climb 18.7% through August followed by Jaguar with 18.6%. SEAT, Land Rover, Mercedes, Honda and Kia also saw gains in the period.

In France, Peugeot and Citroen deliveries suffered the greatest drop among major brands in the first eight months, down 10.5% and 14.3%, respectively, while Renault continued to lose market share, down 7.9%. However, Renault sales rose 1.5% in August as the brand began to climb out a deep hole from earlier in the year.

Similarly, General Motors Group saw a 0.5% uptick in August delivers and now is down just 8.3% on the year. Ford was down 1.5% in August, also an improvement from its 6.9% loss for the year compared with like-2012.

Europe’s overall economy is sluggish, but there are signs that it, too, is near bottom.

“We are seeingthe last few months a more favorable environment for European equities, while the euro area seems to (be emerging) from the recession,” says Wouter Sturkenboom, strategist at Russell Investments Europe. “As the European economybegins to improve, the European stock markets are brightening up in turn."