The European car market continued stuck in reverse this summer, according to the latest sales data released this morning by ACEA, the automakers trade association. This continues a worrisome downward trend from the 2nd quarter of 2010 when vast taxpayer-subsidized replacement programs initiated the previous year began expiring.
As in the U.S., European taxpayers appear to be revolting against an endless expansion of government spending, making further subsidies of local industries increasingly difficult.
While the results are important in themselves because they involve the world’s players and their ability to fund future products to ensure survival, it is also indicative of where the U.S. market might be heading with, say, five or more makers competing closely for the top volume rankings.
In Europe all others fight for table scraps as smaller makers who need to play in global markets use marginal operations there to survive. It could happen here. Once upon a time a maker could thrive in the U.S. alone – it’s now a business planning fairy tale in my view.
In Europe, new registrations fell by 18.6% in July and 12.9% in August. Eight months into the year, new cars in the EU totaled only 9,021,703 units or 3.5% less than over the same depressed period a year ago, which itself was artificially propped up by government spending on incentive programs.
In July, a double-digit collapse occurred in the main volume markets, ranging from -12.8% in France to -13.2% in the UK, -24.1% in Spain, -25.7% in Italy and a whopping -30.2% in Germany, traditionally Europe’s economic powerhouse and export giant. Overall, 1,032,893 new cars were registered in the EU, or 18.6% less than in July last year.