European car sales plunge ends woeful year for automotive industry

EU car sales fell 16.3% in December – with non-eurozone members Britain and Sweden the exceptions

Europe’s market for new cars shrank in December at its fastest monthly pace since October 2010, closing a year burdened by heavy declines in all major eurozone economies.

Two fewer working days on average helped send new car registrations in the European Union tumbling 16.3% last month to 799,407 vehicles, according to data published on Wednesday by the European automotive industry association ACEA.

The figures highlight the crisis for carmakers in Europe, where over-indebted banks will not lend cash-strapped consumers the funds to buy new cars as austerity pushes joblessness to a record high of almost 12%.

Exceptions last month were non-eurozone EU members such as Britain and Sweden, where demand increased. But states not even in the EU, such as Switzerland and Norway, suffered contractions.

Annual car sales volumes in the EU fell 8.2% to 12.05m vehicles in 2012, the ACEA said. In the eurozone, they dropped 11.3% to just under 9m, according to Reuters calculations.

For 2013, market forecaster LMC Automotive recently estimated a 3.1% drop in western European sales to 11.4m vehicles, compared with levels of around 12.8m and 13m in 2011 and 2010, respectively.

Among the worst hit last month were US carmakers General Motors and Ford, where group sales each fell roughly 27%, with the Chevrolet brand leading them all lower and posting an even weaker month than its ailing sister Opel.

Even Volkswagen’s sales of its core VW brand fell 22%. The December plunge at its luxury brand Audi nearly matched that.

Korean brands Hyundai and Kia remained a rare bright spot, gaining 10.5% and 6.8% respectively. The duo have made a name for themselves with attractively designed affordable cars that enjoy long warranties.

The worst monthly decline in recent years was the 27% drop in January 2009, while the worst annual contraction was 1993’s slide of 16.9%.

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