PARIS — Demand for new cars in Europe fell sharply in July and August, data showed on Tuesday, darkening the outlook for carmakers banking on higher sales to meet profitability targets despite spikes in raw material costs.
New car registrations fell by 7.3 per cent in July and 15.6 per cent in August compared with a year ago because of a general deterioration in consumer confidence and the effect of continuing high fuel prices, the European industry body ACEA said on Tuesday.
Over the first eight months of the year, new car registrations in Europe fell by 3.9 per cent.
The DJ Stoxx European autos index was down 0.85 per cent at 0905 GMT, with a 1.3 per cent drop at Renault. PSA Peugeot Citroen will be hardest hit. It makes the top-end Laguna, whose sales have fallen short of expectations.
In July, France's second biggest auto group cut its target of 3.3 million vehicle sales in 2009 by 300,000 units.
Renault sales grew in Germany, the Netherlands, Belgium, Austria and Portugal, but fell in France, Spain and Italy in August.
ACEA said car registrations fell overall in August in western Europe, with only Portugal showing growth. Ireland and Spain posted the sharpest falls while France saw the smallest decrease.
Registrations were up 2.7 per cent in the new EU member states, reflecting growth in Poland of 9.1 per cent and the Czech Republic with 8.2 per cent while Hungary was down 4.9 per cent and Romania fell 3.5 per cent.
Worldwide, Renault's August vehicle sales across the Renault, Dacia and Renault Samsung Motors brands fell 5.8 per cent in a month with two fewer business days than the same month last year.
Vehicle parts manufacturer Valeo on Monday said the market was “difficult” but that it plans to continue to invest around 5.5 per cent of its sales - which last year reached 9.68 billion euros - in research and development.
“We are in a rotten market but you know that in difficult times, Valeo excels,” Chief Executive Officer Thierry Morin told Reuters on the sidelines of a debate.
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