PARIS -- After shrinking for 18 months under the pressures of economic reforms on business and household budgets, the EU car market slumped to a 17-year low, trade data showed on Tuesday.
In the first six months of the year, sales fell by 6.6% to a total of 6.205 million.
The EU car market has been shrinking for 18 months, with one small upward blip in April when there were two more working days than in the same month last year.
In June, sales fell by 5.6% on a 12-month comparison across the European Union to a total of 11.3 million, the lowest volume since 1996.
Sales in France fell by 8.4%, in Italy by 5.5% and in Germany by 4.7%.
In Spain the fall was contained to 0.7% by government help for the purchase of new cars, but the overall Spanish new car market is at its lowest level for 20 years.
French manufacturers see their national market contracting this year by 8% to the lowest level since 1997.
The German auto industry has shown resilience to the depressed trading conditions in Europe, notably with a strong exports performance to emerging markets. But German auto firms are also finding market conditions make hard going. They expect domestic sales, the biggest European market, to fall to 2.9-3.0 million from 3.083 million last year.
The head of German top-of-the-range car maker BMW, Norbert Reithofer, told the financial daily Boersen-Zeitung on Tuesday: "Overall, the market in western Europe will contract by around 5% this year and remains a huge challenge for carmakers."
Furthermore, the situation could last until the middle of next year, he warned. "Maybe we'll see a slight pick-up in the market during the second half of 2014," said Reithofer
The exception was Britain where sales have risen in recent months and grew again by 13.4% in June. Manufacturers in Britain are hoping that sales this year will exceed the figure of 2.04 million in 2012.
Sales by Brand
The performance by brand varied, with the bleakest for PSA Peugeot Citroen which suffered a 10.8% fall in June. In the first half of the year sales plunged by 13.3%.
Renault, by contrast, raised sales by 1.3% in June largely because of a strong performance by its Romanian Dacia range and the Duster four-wheel-drive vehicle.
In the first half, sales by General Motors fell by 11%, by Ford by 9.6%, by Fiat 10%, Toyota 8.1% and Renault 4.5%.
But French group Renault held up in June with its low-cost Dacia brand, riding far higher than its struggling rival Peugeot Citroen.
Meanwhile the giant German group Volkswagen limited the damage to its sales.
The latest data, from the European Automobile Manufacturers' Association, casts a shadow over some signals that the EU economy may be recovering slowly, since in several EU countries the manufacture of cars is an important indicator of production, exports and consumer confidence.
The depressed figures reflect the impact of low growth and budget reforms on business and household spending in the European Union where several countries are in recession or bumping along with low growth.
-Laure Fillon, AFP
Copyright Agence France Presse, 2013
