WESTERN EUROPE
Europe heading for worst car sales in 17 years
July’s 8% drop in West European car sales, dragged down Germany’s third fall in three months - fuels fears of hard landing

Published: Wed, 08 August 2012 19:32:09 GMT
 

Another 8 per cent drop in July’s West European new car sales, coming in the wake of a milder and briefly soothing 1.7 per cent decline only the month before, says that the underlying car sales slippage shows no sign of easing.

On the contrary, the fact that Germany’s July car market did not rise but fall – down 5 per cent - marking the second fall in the past three months, has stoked fears that this year’s already frail and progressively weakening new car market could now be heading for a hard landing.

This year’s car sales total is currently tracking the lowest annual sales total for seventeen years, conceivably shrinking to just 12 million units at best, which has been the annualised sales rate in the first seven months of this year

Deepening consumer gloom, which first sank its teeth into austerity-struck car markets like Greece, Portugal, Spain and Ireland, but initially left some countries almost unaffected, suddenly appears to be spreading around the continent like a flash of lightning.

That at least is the message from AID’s exclusively compiled car sales figures for July, showing that the widely reported and much debated ill-effects of the toxic eurozone crisis has now also gripped car showrooms in the Netherlands, Switzerland, Finland and Sweden.

But it was a previously unexpected 5 per cent drop in Germany’s July car sales, marking the second fall in the past three months of lacklustre trading, which finally drove home the message that the pain could still get worse before it gets better.

Volkswagen brand, thanks to superior image, new model avalanche and switch to predatory pricing strategy, continues to steal sales from direct rivals

Of late attention has also focused on the region’s leading volume carmakers, whose lives have changed a great deal due to the intensifying squeeze from above and below. On the face of it, one of the few notable exceptions to these trends is the Volkswagen marque.

The extent of the VW brand’s cunning game plan can be judged once more by this year’s latest state of play.

Tellingly, at a time when virtually all its direct rivals measured their success and stamina in terms of who lost the least ground in this year’s fast ebbing West European car sales arena, the Volkswagen brand remains on track for yet another market share record.

By holding its sales slippage in seven months of ebbing sales to just over 2 per cent, the Volkswagen brand continued to eat into the market share of its lesser rivals.

After climbing to close on 14 per cent this July, its seven months share of the action zoomed to 13 per cent, thus beating last year’s comparative levels by yet another half-a-percentage point.

If it stays that way by close of play in late December this year, which seems likely, the VW marque alone will command the biggest ever slice of West Europe’s new car market.