European car sales dropped 9 per cent in March, the smallest decline in six months, as government-backed incentives boosted demand for Fiats and Volkswagens in Germany and France.
New car registrations fell to 1.51 million vehicles from 1.66 million a year earlier, an 11th consecutive monthly decline, the Brussels-based European Automobile Manufacturers’ Association said in a statement today.
First-quarter sales tumbled 17 per cent to 3.44 million vehicles.
The auto-sales decline slowed from an 18 per cent drop in February and a 27 per cent plunge in January after aid for purchases sparked a recovery for some markets.
In Germany, where the government is offering a €2,500 ($3,300) trade-in on cars aged nine years or more, registrations soared 40 per cent last month, while a less-generous scrapping incentive in France produced an 8 per cent gain.
“The numbers are artificially boosted by government money and discounts, and the hype is wearing off,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen.
“The problems with profitability will rather be larger than smaller through scrapping incentives.”
Sales continued to sag in markets lacking government-backed incentives or other sales props, with a 31 per cent UK contraction “reflecting the overall persistent lack of confidence in the economy,” the group said.
Western European sales fell 8 per cent, while Eastern Europe plunged 25 per cent.
German luxury-car makers led the decline, with BMW recording a 21 per cent slump in registrations to 73,904 vehicles, as recession worries and tighter credit kept consumers out of its showrooms.
Daimler AG’s Mercedes sales fell 16 per cent. BMW added 1.5 cents, or 0.1 per cent, to €25.72 at 9.15am in Frankfurt trading. Daimler fell 0.1 per cent to €24.92.
Volkswagen gained 0.1 per cent to €242.01. Uncertainty over General Motors looming bankruptcy contributed to a 20 per cent sales drop for the biggest US carmaker.
Paris-based PSA Peugeot Citroen, Europe’s second- largest, posted a 9 per cent decline in registrations, outpaced by smaller domestic rival Renault SA’s 11 per cent slide, with a 16 per cent drop at its namesake brand.
Agencies