Friday 3 April 2009

New car sales rise in Europe but plummet in U.S


Germany’s year-on-year car sales were up by 40% in March, a figure boosted by the success of the German scrappage scheme.

Total sales in Germany last month were 401,000, according to figures released by the German car importer’s association VDIK. Before the scheme, Dacia sold around 100 weekly in Germany and now sell around 1,000 a week. Dacia said that if the UK inherits the scrappage scheme, the budget car firm could arrive within months.

The news from Germany comes amid renewed calls for the UK government to act quickly and bring in its own car scrappage scheme.

With some analysts predicting another sharp fall in new car sales for March, Paul Williams, chairman of the Retail Motor Industry Foundation, said: “Measures to help to revive new-car sales in the UK, including the introduction of a vehicle scrappage scheme, must be enacted as soon as possible.”

The success of the German government’s scrappage scheme, which offers buyers of cars under 12 months old a €2500 (£2285) discount if they scrap a car more than nine years old, has prompted Berlin to extend the scheme beyond the original €1.5bn (£1.37bn) it invested.

Volker Lange, head of VDIK, said: “The decision to top up funds for the bonus scheme came just in time given that the money originally approved has run out.”

March’s 40% rise follows a 21.5% year-on-year increase in February. The scrappage scheme in Italy also seems to have reignited the market, as March’s year-on-year new car registrations rose by 0.24%, the first monthly increase there in a year.

Italian new car orders, however, were up by more than a third to 276,000, which should lead to a large boost in new car registrations in April.

Fiat had a particularly good month in March, as new registrations across its three brands were up by 6.1% to 69,882 units.

The German and Italian increases follows the news on Wednesday that French new car registrations rise 8.1% to 204,095 and Spanish registrations improved on February’s figures to record a drop of 38.7%.

But not all car manufacturers agree that scrappage schemes are the answer to their problems, citing the problem of future demand being compressed into the first six months of the year.

"Following the lifting of the rebate there will be a sales slump," said Mercedes boss Dieter Zetsche. "This has occurred in other countries. Because of this, it is not in the best interests of the car makers."


New car registrations in France were up 8.1% in March, partly due to the success of the country’s scrappage scheme.

Year-on-year new registrations increased to 204,095, which was up from the 188,870 new cars registered in 2008.

The French car manufacturers' association, the CCFA, who published the figures, said that 30 to 40% of March’s registrations were due to the success of the country’s scrappage scheme, which offers buyers of a new, low emission car at a discount if they trade in an old car.

Production of the Peugeot 107, Citroen C1 and Renault Twingo is being raised to keep up with increased demand for the French city cars.

Spain’s year-on-year new car registrations in March were down 38.7%, although this has been interpreted as a positive sign because February’s sales were 48.8% down year-on-year.


U.S car makers reported dramatic year-on-year drops for March - but the figures have been met with cautious optimism by business analysts.

The Big Three suffered the most dramatic drop-offs, with General Motors posting a 45% drop, Ford a 41% fall and Chrysler a decline of 39%.

Chrysler said its results were better than feared; it sold 101,000 cars, the first time it had exceeded 100,000 sales a month since September.

GM chief sales analyst Mike DiGiovanni said, "I think we're seeing maybe the first signs of a brightening in the outlook for the auto industry."

Efraim Levy, analyst with Standard & Poor's Equity Research, also offered cautious optimism. "We believe we may be at or near the trough of the industry's year-to-year comparisons," he said, "but do not see an uptick in industry demand before (the fourth quarter of 2009), at the earliest."

GM and Chrysler are currently seeking more than $20bn (£14bn) of government aid.

In the UK, it is almost certain the the Ford Fiesta will reign as the UK's best selling car for the 5th month in a row.

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