European December Car Sales Fall 16% on U.S. Producers

European car sales in December fell the most in more than two years as recessions in the southern part of the region cut demand at Ford Motor Co. (F), General Motors Co. (GM) and Renault SA. (RNO)

Registrations plunged 16 percent to 838,428 vehicles last month from 997,842 a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement. Full-year sales in the European Union plus Iceland, Norway and Switzerland declined 7.8 percent to 12.5 million cars, with the slump in the EU alone the worst in 19 years.

Car manufacturers have announced 30,000 job cuts in Europe since July, with Renault and Paris-based PSA Peugeot Citroen (UG) planning workforce cutbacks of 17 percent in their home market of France, amid a contraction in the economy of the 17 countries using the euro. Manufacturers of mid-range cars, such as Peugeot and Turin, Italy-based Fiat SpA (F), have exacerbated losses with price cuts that failed to win buyers.

The decline in December was the biggest since a 17 percent drop in October 2010. Industrywide deliveries last month in western Europe, which excludes countries that have joined the EU since mid-2004, dropped 15 percent to 781,830 vehicles. That pushed full-year sales down 8.1 percent to 11.8 million cars. EU registrations were the lowest since 1995, the ACEA said.

Plant Shutdowns
European sales by Dearborn, Michigan-based Ford fell 27 percent in December. The manufacturer, which is forecasting a combined loss of $3 billion in the region for last year and 2013, is shutting vehicle and component plants in the U.K. and Belgium in the next two years.

GM’s group sales in Europe last month also dropped 27 percent, led by a 30 percent decline for the Chevrolet brand. The company’s Opel division said Dec. 10 that it will stop making cars at its plant in Bochum, Germany, in 2016, where the assembly line employs about 3,100 workers. The shutdown would be the first of a German auto plant since World War II.

Peugeot’s European sales fell 19 percent in December, while registrations at Renault, which is based in the Paris suburb of Boulogne-Billancourt, declined at the same pace. Fiat’s European sales decreased 18 percent.

Four of Europe’s five biggest automotive markets shrank last month, with deliveries in Germany, the region’s biggest economy, falling 16 percent. That cut full-year sales in the country 2.9 percent to 3.1 million vehicles. The U.K., with an increase of 5.3 percent to 2 million cars in 2012, overtook France to become Europe’s second-largest automotive market.

Industry Losses
Demand for cars in Europe is set to drop for a sixth consecutive year in 2013, according to IHS Automotive. Fiat Chief Executive Officer Sergio Marchionne told reporters at the Detroit car show on Jan. 14 that volume producers together probably lost 5 billion euros ($6.7 billion) in Europe in 2012, and carmakers must find a “solution” to restore earnings in the region.

Renault said yesterday that it will eliminate 7,500 jobs in France through 2016, including 5,700 posts that will disappear when people retire or quit and aren’t replaced. Its global workforce totaled 128,322 employees at the end of 2011.

The move follows job cuts and factory shutdowns in Europe announced in the past two months by Fiat, Peugeot, GM and Honda Motor Co. (7267) Tokyo-based whose sales in the region dropped 6.7 percent in December, said on Jan. 11 that it will eliminate as many as 800 positions at its auto plant in Swindon, England.

Cutting Jobs
Fiat and Peugeot each said in December that they plan to cut 1,500 jobs. The measures at Peugeot come on top of an 8,000- post cutback it outlined in July, when the carmaker also said it will close an auto factory on the outskirts of Paris, and disposals last year of non-manufacturing assets.

Renault and Fiat don’t foresee a need to shutter more plants in their home countries, their respective chief executive officers said yesterday at the North American International Auto Show in Detroit.

Volkswagen AG (VOW), Europe’s biggest carmaker, posted a 15 percent decline in sales in the region last month, led by a 20 percent drop at the VW brand. The Audi division, the world’s second-largest maker of luxury vehicles, sold 18 percent fewer cars in Europe in December.