French bear brunt of Europe's deepening auto slump

Fri Dec 14, 2012 6:48am EST
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By Laurence Frost and Andreas Cremer

PARIS/BERLIN (Reuters) - France's PSA Peugeot Citroen (PEUP.PA: Quote) and Renault (RENA.PA: Quote) led a 10 percent decline in European car sales in November, the market's first double-digit contraction in more than two years as economic gloom spread east and north.

The French suffered most - closely followed by General Motors (GM.N: Quote) and Fiat FIA.MI - as demand weakened sharply at home, in Germany and in eastern Europe, according to data published on Friday by the Association of European Carmakers.

Total European registrations fell to 965,918 cars for the month and 11.69 million for January-November, down 7.2 percent on the same period last year.

"European end market weakness is showing no signs of abating," London-based Credit Suisse analyst David Arnold wrote in a note published on Friday.

With December a seasonally weak sales month, Europe appears on course to record a similar drop for the year as a whole, to about 12.2 million total sales - its lowest in close to two decades. Most commentators now expect 2013 volumes to decline further, according to Arnold.

"Tough times clearly still lie ahead for Europe's mass-market car players," the Credit Suisse analyst said.

Paris-based Peugeot, scrapping more than 10,000 jobs and a car plant to stem losses, suffered a 16 percent regional sales slide as its home market shrank 19 percent.

Renault's November registrations plunged 27 percent as the spreading economic weakness hurt sales of its no-frills Dacia brand, which until recently had resisted the worst of the slump.   Continued...

The logo of French car manufacturer Renault is seen in front of the Eiffel tower at a dealership in Paris, November 2, 2012. REUTERS/Christian Hartmann