Renault is having great success with its Megane compact and the Scenic minivan.
The European car market took a sharp turn for the worse in May. Registrations declined 9% from a year earlier as “cash for clunkers” schemes that were in place last year expired. It was the second straight monthly decline.
The latest trend has negative financial implications for all of the Detroit Three – directly in the case of Ford Motor Company and General Motors Company, and indirectly for Chrysler Group because of Fiat’s decline.
Renault group with a 1.5% increase in market share to 10.5% displaced Ford Motor Company (9.4%) to become Europe’s third largest carmaker after number one Volkswagen (22.1% share) and second place PSA/Peugeot-Citroen (13.9%). Fiat Group was fifth (7.9% share) and suffered a 23% sales decline.
“Our primary focus at Ford is to improve our profitability – and we successfully achieved this in the first quarter of the year” said Ingvar Sviggum, vice-president of Marketing, Sales and Service at Ford of Europe. Ford is saying the market will be in the 14-15 million unit range, down from 15.9 in 2009.
“We’ve long been prepared for the slow-down in the market and are not surprised that many of our competitors continue to react with the tactic of heavy discounting, which we believe is ultimately unsustainable and damages the brand,” said Sviggum.
Overall General Motors European sales fell 19%, with Opel/Vauxhall down 19% and Chevrolet volume down 11%.
GM has just announced it is giving up on its request for loan guarantees from European governments after the German national government rejected its application last week. U.S. taxpayers hold 61% of GM, which has already committed €1.9 billion to an Opel restructuring. Now another €1.4 billion will have to come from GM’s coffers. Opel’s decline will hurt badly needed cash flow.
Germany, Europe’s largest market, registered the most cars. However, it also recorded the biggest decrease in registrations of all major markets (-35.1%) , followed by Italy (-13.8%) and France (-11.5%).
The UK (+13.5%) and Spain (+44.6%) increased registrations compared to the low levels observed last year. Slovakia saw its market shrink the most (-41.8%) while Ireland expanded the most (+70.6%).
After the first five months of the year the European market remains stalled with only a 1.9% increase from 2009 when compared with the same period.
In 2010 5,943,096 new cars have been registered thus far. Of the most important markets, Germany was the only one recording a downturn (-27.7%). France (+7.2%), Italy (+7.9%), the UK (+22.0%) and Spain (+43.5%) all posted growth. The largest increase was noted in Portugal (+56.3%) while the steepest decline was found in Romania (-49.0%).