European Auto Sales Continue to Slide

By Douglas A. McIntyre Updated Jul 15, 10:02PM EDT · Published Jul 15, 4:33PM EDT

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Sales of new cars in Europe, as measured by new car registrations, dropped in June for the third consecutive month. The slide is attributed to the end of what the Europeans call scrappage plans, better known in the US as the “cash-for-clunkers” program. The following chart shows the spike in new car registrations in March, before most of the scrappage plans expired on April 1.

Ford Motor Co. (NYSE: F) saw a -15% drop in month-over-month sales, and General Motors saw sales drop of just -0.2%, mainly on the strength of sales of the Vauxhall and Opel brands. Toyota Motor Corp. (NYSE: TM) had a -12.4% drop in sales.

Compared with June 2009, European new car registrations were down 6.9%, better than the 7.4% year-over-year decline in April and the 9.3% decline in May. Car registrations totaled 1,341,092 in all of Europe in June. For the first half of 2010, new car registrations were barely better, up 0.2% compared with 2009. Compared with the first six months of 2008, new registrations fell by 10.3%.

German registrations fell -32.3% in June, compared with May, and Italian registrations fell -19.1%. The largest drop came in Slovakia, which was down -40.6% month-over-month. Ireland saw the largest gain at 75.8% over May, Spain was up 25.6%, and the UK was up 10.8%.

For the first six months of the year, 7,285,487 new cars were registered in Europe. The steepest drop was recorded in Hungary, down -43.8%, while Germany saw a drop of -28.7%. Portuguese new car registrations rose 57.7%, UK registrations rose 19.9%, and Spanish registrations rose 39.5%.

The European forecast for new car purchases in 2010 is 14-15 million, but that number may be in jeopardy. The Wall Street Journal reports that analysts at Barclays Capital expect the declines to get worse in the second half of the year, falling by 18% in the third quarter and 27% in the fourth quarter.

However, an analyst at Sanford Bernstein foresees a continuing revival of sales because the scrappage plans do not seem to have pulled demand forward. This analyst sees buyers returning to showrooms, even if slowly, and buying “larger, more profitable vehicles.”

In a related story this morning, Ford is changing its top European management as soon as it completes the sale of its Volvo division to China’s Geeley, expected later this quarter. Volvo’s current CEO will become chairman and CEO of Ford of Europe. The current head of Ford’s European group will become an EVP in charge of global manufacturing and labor affairs operations.

Ford’s shares are trading down slightly today, off about -0.17%. Toyota shares are also down about -1.3% today.

Paul Ausick

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.