European Car Sales Drop To 20-Year Low, Germany Clobbered

Tyler Durden's picture


When the S&P, always so conveniently ahead of the curve, yesterday revised its forecast for Europe from growth in the second half of 2013 to 2014 one couldn't help but golf clap, as well as wonder if they finally started looking at the fundamental depressionary reality on the ground instead of the rating agency's infamous "models." A depressionary reality confirmed by the latest car sales number for May which just hit a fresh 20 year low.

From AP:

European car sales hit their lowest level for the month of May in 20 years as the region's recession dragged on, the European automakers' association said Tuesday.

They meant depression instead of recession, but it's an honest mistake.

Passenger car sale demand for May dropped by 5.9 percent on the same month last year in the 27-country European Union to 1.042 million units, the lowest level since May 1993, when sales dropped below 1 million, according to new figures released by ACEA. For the first five months of the year, sales dropped 6.8 percent to 5.07 million.


The economy of the 17 European Union countries that use the euro shrank by 0.2 percent in the first quarter of this year — the sixth such decline in a row — and unemployment is at 12.2 percent. Meanwhile, the wider 27-country EU has also seen its economy slide into recession, shrinking 0.1 percent in the first three months of 2013.


Europe's recession has hit carmakers especially hard, as consumers put off purchases of high-ticket price items like cars under rising unemployment. Carmakers have announced factory closures and put off new car launches in a bid for survival and to return their struggling European operations to profitability.

And while the picture in the periphery has been bleak for a long, long time, the collapse in German car sales is certainly a novel development:

Even in Germany, Europe's strongest economy, car sales dropped to a worrying 9.9 percent in May. In Europe's other leading car markets, the picture was just as bad: Italy was down 8 percent, France saw a 10.4 percent drop, and Spain was off by 2.6 percent. Britain was the only major car market to post growth, up 11 percent.

It may be time for France to further bailout its semi-nationalized car makers. Just to make them more efficient and what not:

Mass market carmakers — PSA Peugeot-Citroen, Renault, Ford, General Motors and Fiat — all suffered double-digit declines in May. Germany's Volkswagen saw its sales drop at a slightly lower rate — a 2.8 percent drop in brand sales and 5.9 percent decline for the group. Sales of Mercedes brand were up 2.8 percent, while BMW brand sales declined 8.1 percent.

So aside from this, the record high unemployment, the record high non-performing loans, and the constant threat of bank deposit confiscation virtually everywhere now courtesy of Diesel-BOOM, Europe is doing just great: after all how else could one explain the jump in German investor confidence? Wait, Japan's carry trade? What's that...

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Tue, 06/18/2013 - 07:58 | 3667383 Debugas
Debugas's picture

GM is selling new cars in China for under $10000

prices in US and in EU are still very overbloated


I bought my first car for 2000 euros and still use it

Tue, 06/18/2013 - 08:04 | 3667403 jbvtme
jbvtme's picture

that cute model could use some obama care

Tue, 06/18/2013 - 08:14 | 3667420 SpanishGoop
SpanishGoop's picture

Obama "Phone", "Care", "Car".

Everybody an iPhone, an iBandage and a Chevy Volt.


Tue, 06/18/2013 - 08:42 | 3667483 WayBehind
WayBehind's picture

If you dont have job or money to go shopping, you dont need a car. Very simple ...

Tue, 06/18/2013 - 09:42 | 3667660 Sudden Debt
Sudden Debt's picture

Indeed and it says so in the numbers.

1993, the year when there was mostly 1 person working in the family and mommy stayed home takeing care of the kids.

So you could say we're down 50% or more in carsales.

And also a look to 1993 and now... a lot of kids where less fucked up than then now. ADHD and other fucked up stuff, where does it all come from. But that's another topic :)

Tue, 06/18/2013 - 10:30 | 3667907 Panafrican Funk...
Panafrican Funktron Robot's picture

Auto sales in general appear to be peaking (even in China) and will be a drag on future global GDP growth.  Enter hedonic adjustments.  

Tue, 06/18/2013 - 12:20 | 3668479 macholatte
macholatte's picture


A depressionary reality confirmed


That's what the doctor said ....... it was golf clap.


Tue, 06/18/2013 - 08:48 | 3667493 SpanishGoop
SpanishGoop's picture

How many pairs of shoes can you get for a second hand Chevy Volt, two ?


Tue, 06/18/2013 - 08:56 | 3667506 knukles
knukles's picture

Whyz that look like the pictures were from Deetriot?

Dystopian this,
Dystopian that,
With a lack of morals,
And a lack of tact


Tue, 06/18/2013 - 09:15 | 3667571 FeralSerf
FeralSerf's picture

Obama phones are used by the system (NSA) to keep track of the homeless or otherwise difficult to count sheep. They don't always work as intended though.

Tue, 06/18/2013 - 08:32 | 3667466 f16hoser
f16hoser's picture

He's Gay.

Tue, 06/18/2013 - 11:18 | 3668176 A Nanny Moose
A Nanny Moose's picture

The car, or the girl?

Tue, 06/18/2013 - 08:11 | 3667416 NoWayJose
NoWayJose's picture

But every car sold in the US and the EU today has to have special engine crap added for air quality, all manner of expensive safety features, etc, etc. the much less expensive GM car in China does not need these things. The question for tomorrow is 'do we need these things in a competitive global economy?'

Tue, 06/18/2013 - 08:17 | 3667425 yrbmegr
yrbmegr's picture

And, in China, they are blessed with air you can cut with a knife, and water that tastes like pork.

Tue, 06/18/2013 - 09:29 | 3667619 ninja247
ninja247's picture

Auto emissions has nothing to do with the pollution in China. It's all coal related.

Tue, 06/18/2013 - 10:25 | 3667879 The Proletariat
The Proletariat's picture


Tue, 06/18/2013 - 11:06 | 3668126 PrintemDano
PrintemDano's picture

Yum, pork......

Tue, 06/18/2013 - 08:24 | 3667444 Debugas
Debugas's picture

and you forgot compulsory insurance which in many cases costs more than the car itself

Tue, 06/18/2013 - 08:48 | 3667491 NoDebt
NoDebt's picture

97 dollar oil doesnt help either.

Tue, 06/18/2013 - 09:50 | 3667704 CheapBastard
CheapBastard's picture

"The car companies didn't build that."

Tue, 06/18/2013 - 12:24 | 3668497 Midasking
Midasking's picture

Not sure why they don't do another cash for clunkers program but just world wide.  Actually you could do it for everything like Tv's, socks, shoes... problem solved.. next?

Tue, 06/18/2013 - 07:57 | 3667385 BeetleBailey
BeetleBailey's picture

Germany IS the Euro...and (right now) it's "strong"........

Shorting opportunities.......anyone?

Tue, 06/18/2013 - 07:58 | 3667389 ParkAveFlasher
ParkAveFlasher's picture

'96 Buick Skylark ftw!

Wed, 06/19/2013 - 01:30 | 3670513 MisterMousePotato
MisterMousePotato's picture

1997 Lincoln Town Car. Best automobile ever made by Detroit. Detroit? Wait, what the fuck am I saying?!?

Tue, 06/18/2013 - 08:04 | 3667392 Cognitive Dissonance
Cognitive Dissonance's picture

May I humbly suggest that a two-fer-one sale might help those sluggish sales numbers?

<I will gladly pay you in 2028 for two Mercedes Benz convertibles today.>

Tue, 06/18/2013 - 08:25 | 3667448 Dugald
Dugald's picture

Not having to recall umpteen thousand cars would be a big plus........


Tue, 06/18/2013 - 08:29 | 3667454 LawsofPhysics
LawsofPhysics's picture

Well, the insurance companies would certainly like that.  Fuck the paper-pushers CD, all of them.

Tue, 06/18/2013 - 10:02 | 3667758 CheapBastard
CheapBastard's picture

Audi will recall more than 6000 hatchbacks due to the same gearbox safety concerns that prompted its parent company Volkswagen to announce a recall of almost 26,000 vehicles.


Used to be quality cars.....

Tue, 06/18/2013 - 08:00 | 3667393 RaceToTheBottom
RaceToTheBottom's picture

Loved the picture of the model drapped overthe crashed up car....  Loved her fake wounds...

Tue, 06/18/2013 - 08:00 | 3667394 GetZeeGold
GetZeeGold's picture



Might have something to do with no one having a job.

Tue, 06/18/2013 - 08:07 | 3667409 Debugas
Debugas's picture

it is not just jobs

i can rent a car to drive around the city for 30 eurocents an hour plus 30 eurocents a kilometer.

i see no point in buying brand new city car for a 5 digit number - it will never pay off


Tue, 06/18/2013 - 09:18 | 3667581 FeralSerf
FeralSerf's picture

Not to mention that parking is a problem. It's cheaper in Zürich to rent a car than it is to park it.

Tue, 06/18/2013 - 08:01 | 3667396 Josephine29
Josephine29's picture

But UK inflation was up does that count?


What are today’s numbers?

Inflation is back on the rise again.

The Consumer Prices Index (CPI) grew by 2.7% in the year to May 2013, up from 2.4% in April

The RPI 12-month rate for May stood at 3.1%,(up from 2.9% in April)

A major influence on this month’s rise was transport costs as detailed below.

The majority of the contribution came from air transport and motor fuels. Air fares rose by 22.0% on the month this year compared with a much more modest rise of 1.4% in 2012. Petrol and diesel prices both fell, overall, between April and May this year but by less than a year ago.

There was also a rise in the cost of clothing and the only fall came from food and beverages. Those who have followed my Cauliflower watch updates on twitter will have noted that the price of Cauliflower’s did support this.

If we look at the underlying indices we see that the Retail Price Index has reached something of a threshold as a reading of 250 tells us that prices are 2 and a half times what they were when it was re-based in 1987.


Tue, 06/18/2013 - 08:12 | 3667417 Rip van Wrinkle
Rip van Wrinkle's picture

So the price of food fell in the UK? Really? Could anyone tell me where my food bill went down last month?


And 'beverages'...that was Osborne's coup de grace in the budget. He cut the tax by a penny a pint. What a f*cking genius he is.

Tue, 06/18/2013 - 09:48 | 3667698 flapdoodle
flapdoodle's picture

Tesco has some out-of-date bangers and turnips on  sale - that must have pushed down the indices...

Tue, 06/18/2013 - 11:43 | 3668280 Mototard at Large
Mototard at Large's picture

Horse, dog or beef?  :-)

Tue, 06/18/2013 - 12:43 | 3668581 Navymugsy
Navymugsy's picture

I got a pineapple at Sainsbury's for 50p yesterday but everything else was expensive.

Tue, 06/18/2013 - 08:01 | 3667397 rsnoble
rsnoble's picture

The avg consumer in the US would have to be an idiot to sign up for a new car loan in this economy.  And then get stuck with full coverage ins payments on top of it.  All they had to do was  introduce financing for everyone and prove once again they really are idiots.

Tue, 06/18/2013 - 08:18 | 3667431 de3de8
de3de8's picture

This country is full of idiots. 7 year car loans and the latest is tires to rent!

Tue, 06/18/2013 - 11:26 | 3668218 A Nanny Moose
A Nanny Moose's picture

and in CA you can add 10% sales tax to the whole transaction. By the time one puts gas in the car and pays licensing fees, over the life of the car, the State will make more off the sale of the car than the Manufacturer and the Dealer. What value has the State added?

Tue, 06/18/2013 - 08:06 | 3667405 Dubaibanker
Dubaibanker's picture

Talking of 'growth' markets.....India is having 'negative growth' (lol) car sales...among other things....I am looking for growth.....can someone (read Bernanke) direct me to it? / sarc

Tue, 06/18/2013 - 08:06 | 3667406 ziggy59
ziggy59's picture

..But in the USSA, we are selling cars by the carloads full...

What the carload is loaded with..BS!

Tue, 06/18/2013 - 08:08 | 3667411 B2u
B2u's picture

Why not give away cars for free, just like foodstamps and Obama phones.

Tue, 06/18/2013 - 08:19 | 3667435 de3de8
de3de8's picture

Please, don't give them any more ideas.

Wed, 06/19/2013 - 01:34 | 3670516 MisterMousePotato
MisterMousePotato's picture

Actually, this has been done. Might even still be being done somewhere. Read about it a few years back where the govt somewhere (Philadelphia? Pennsylvania?) somewhere back east, I seem to recall, was actually giving cars to 'low income' types so they could get or work at jobs. Seriously.

Tue, 06/18/2013 - 08:44 | 3667487 Debugas
Debugas's picture

if you realy think about the costs of production in terms of labour hours spent and go into the plant and see how everything is automated....

It looks like the cost of production is indeed close to zero (in man-hours terms)

Tue, 06/18/2013 - 09:00 | 3667513 knukles
knukles's picture

Didn't they already try that with Cash for Clunkers and then a modified subsidy program with electro-mobiles?
Worked swell, just fucking swell.

Tue, 06/18/2013 - 08:14 | 3667419 USisCorrupt
USisCorrupt's picture

Soon they will be offering a young Greek woman as an incentive with each purchase of a new vehicle.

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