As Germany tumbles, so does the rest of Europe (insert your own World War II or Euro currency joke here). As France, Italy and Spain withdrew their “bangers for cash” boondoggles, so did the public’s interest in new cars. The Wall Street Journal reports that in France new car sales dropped 9.8 percent compared to last year. However, according to the French car manufacturers’ association, if you factor out the extra working day in August, sales dropped by 14 percent.
In France, Peugeot-Citroen sales dropped 9.2 percent, which, while bad, is less than the overall market drop. Renault, their Gallic rivals, only dropped 3.8 percent. Why so little? Because Renault made up sales through their Dacia brand which shot up 22 percent. A sign of belt tightening in France as tastes are geared (manually geared, slushboxes are too expensive) towards emerging markets? Renault branded vehicles dropped 9.4 percent. Again below overall market contraction. However, like most European countries France are predicted to show double digit declines due to President Sarkozy pushing for big spending cuts, another impending global recession and changing French attitudes. But a market contraction of 9.8 percent is a walk in the park when we go south towards that pool of red, formerly called he Mediterranean.
Italian car sales dropped by 19.3 percent, to the lowest level in 17 years. Big government spending cuts, withdrawal of incentives and economic fears kept the Italians away from the showrooms. The Italian car market has been dropping for 5 consecutive months and shows no sign of stopping. An Italian think-tank said with typical Italian flair that “the Italian market is in a coma.” Well, if the Italian car market is in a coma, then the Spanish car market is flatlining. Their car sales dropped 24 percent. And not only do they have the same fears and budget concerns as other European countries, but they also have a rampant unemployment problem. At last count, it was at 20 percent, with under 25’s making up a huge chunk of that figure. Well, at least there’s one growth industry in Europe…
This is a preliminary picture. Complete report on European sales once the ACEA numbers come out by the middle of the month. Don’t expect the big picture to change a lot
the international banksters who own the Central Banks create money out of thin air and loan it to spend happy governments who must eventually cut services and raise taxes to service the debt.