European car registrations had their worst January on record - an 8.7% year-over-year decline - as consumers hit by austerity are likely to continue to limit spending on big-ticket items. The Association of European Automakers notes the 918,280 new cars ('tagging' aside) is the slowest January since 1990 and makes the 16th consecutive month of year-over-year drops, as perhaps past car-scrapping schemes may also have hampered sales by encouraging buyers to bring forward planned purchases. During the Great Recession, European auto sales only fell 12 consecutive months. The weakness is broad based with Ford (a record 26% plunge), Peugeot Citron (down 16%) and Toyota (down 16%) as it seems the hopes and dreams of a troughing in the European economy has absolutely not shown up in the car industry. As Reuters reports, citing a CS analyst, "Hopes of an earnings and cash recovery in the second half are misplaced."
European Car Registrations are down YoY 16 months in a row (lower pane) and fell to the lowest January in record (upper pane)...
Looking at the major markets, only the UK posted growth (+11.5%), while downturn prevailed in Germany (-8.6%), Spain (-9.6%), France (-15.1%) and Italy (-17.6%). In absolute figures, Germany remained the largest market with 192,090 new registrations, followed by the UK (143,643 units), France (124,798) and Italy (113,525). Spain registered 49,671 new cars, which was slightly less than Belgium (50,684 units).
After falling to a 17-year low in 2012, European car demand is expected to contract further this year, squeezing mass-market brands still harder between excess capacity and cut-throat pricing. Most carmakers see the regional market shrinking between 3 and 5 percent in 2013.
Tentative hints of a broader euro zone economic upturn have yet to percolate to the car industry.
Germany in particular is weighing on the outlook. After resisting much of last year's slump, Europe's biggest car market is in sharp decline, extended by an 8.6 percent drop in January.