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| European Car Sales Ended Year on High Note, Sort Of | |
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| PARIS — European car sales ended 2013 on a strong note, raising hopes of a market rebound, despite another year of contraction. | PARIS — European car sales ended 2013 on a strong note, raising hopes of a market rebound, despite another year of contraction. |
| The annual decline of 1.7 percent last year was much smaller than analysts had anticipated after a dismal start, and the December gain of 13.3 percent from a year earlier was the biggest monthly increase since 2009. | The annual decline of 1.7 percent last year was much smaller than analysts had anticipated after a dismal start, and the December gain of 13.3 percent from a year earlier was the biggest monthly increase since 2009. |
| The European Union’s new car registrations, a proxy for sales, totaled about 12 million vehicles for the year — the smallest number since 1995, when the bloc had about half as many countries, the European Automobile Manufacturers’ Association reported on Thursday. | The European Union’s new car registrations, a proxy for sales, totaled about 12 million vehicles for the year — the smallest number since 1995, when the bloc had about half as many countries, the European Automobile Manufacturers’ Association reported on Thursday. |
| Car sales have bounced back in the United States since the financial crisis and remained strong in China, but Europe has been battered by a punishingly high jobless rate. That rate is a hangover from the euro zone sovereign debt crisis, and a cultural shift has left young people less interested in driving than their parents’ generation was. | Car sales have bounced back in the United States since the financial crisis and remained strong in China, but Europe has been battered by a punishingly high jobless rate. That rate is a hangover from the euro zone sovereign debt crisis, and a cultural shift has left young people less interested in driving than their parents’ generation was. |
| “We believe the market bottomed last year and the worst is behind us,” said Peter Fuss, of the Ernst & Young Global Automotive Center in Frankfurt. He estimated that sales this year would rise by as much as 4 percent. | “We believe the market bottomed last year and the worst is behind us,” said Peter Fuss, of the Ernst & Young Global Automotive Center in Frankfurt. He estimated that sales this year would rise by as much as 4 percent. |
| Consumer confidence is improving, but remains weak, he said. And he pointed out that car sales had received significant “artificial” support, including from manufacturer discounts and trade-in incentives for older cars in Spain. “We’ll have to wait for 2015 to see what true demand is,” he said. | Consumer confidence is improving, but remains weak, he said. And he pointed out that car sales had received significant “artificial” support, including from manufacturer discounts and trade-in incentives for older cars in Spain. “We’ll have to wait for 2015 to see what true demand is,” he said. |
| Even with a rebound in 2014, “the crisis will still be felt for a long time,” Carlos Da Silva, an analyst at IHS, wrote in a research note. “To put it directly, we do not think that the E.U. market will return to its 2007 peak ... ever.” | Even with a rebound in 2014, “the crisis will still be felt for a long time,” Carlos Da Silva, an analyst at IHS, wrote in a research note. “To put it directly, we do not think that the E.U. market will return to its 2007 peak ... ever.” |
| The association’s data showed that Volkswagen, the largest European automaker, managed to hold the line with a slight decline in 2013, thanks to strong sales of its Seat and Skoda brands. | The association’s data showed that Volkswagen, the largest European automaker, managed to hold the line with a slight decline in 2013, thanks to strong sales of its Seat and Skoda brands. |
| But PSA Peugeot Citroën, the Continent’s second-largest carmaker, had a steady slide in sales. The French company is currently negotiating with the French government and Dongfeng Motor, a state-owned Chinese company, for a major infusion of capital to help it diversify beyond Europe and invest in new technology. | But PSA Peugeot Citroën, the Continent’s second-largest carmaker, had a steady slide in sales. The French company is currently negotiating with the French government and Dongfeng Motor, a state-owned Chinese company, for a major infusion of capital to help it diversify beyond Europe and invest in new technology. |
| Its French rival, Renault, managed a small increase in sales, thanks to the runaway performance of its low-cost Dacia brand, which posted a 23.3 percent gain in 2013 — by far the biggest increase of any brand in Europe. | Its French rival, Renault, managed a small increase in sales, thanks to the runaway performance of its low-cost Dacia brand, which posted a 23.3 percent gain in 2013 — by far the biggest increase of any brand in Europe. |
| Other strong gains were posted by Mazda and Jaguar, while Chevrolet and Lexus had among the steeper declines. | Other strong gains were posted by Mazda and Jaguar, while Chevrolet and Lexus had among the steeper declines. |
| General Motors and Ford Motor had another tough year in Europe, even as their business improved in the United States and in other overseas markets. Fiat, the Italian automaker that is taking full ownership of Chrysler, posted a 7.1 percent decline. | General Motors and Ford Motor had another tough year in Europe, even as their business improved in the United States and in other overseas markets. Fiat, the Italian automaker that is taking full ownership of Chrysler, posted a 7.1 percent decline. |
| There was significant variation between markets, as well. Britain’s was the strongest of the major European Union nations, growing nearly 11 percent in 2013, but that had more to do with easy financing terms than the country’s relatively strong economy. Spain, despite suffering from depression-level unemployment, managed 3.3 percent growth on the basis of government-sponsored trade-in incentives. Sales in Germany, the engine of the European economy, slid 4.2 percent. | There was significant variation between markets, as well. Britain’s was the strongest of the major European Union nations, growing nearly 11 percent in 2013, but that had more to do with easy financing terms than the country’s relatively strong economy. Spain, despite suffering from depression-level unemployment, managed 3.3 percent growth on the basis of government-sponsored trade-in incentives. Sales in Germany, the engine of the European economy, slid 4.2 percent. |
| BMW’s mainstay premium lineup was almost unchanged, but its overall sales dropped as its Mini brand faltered. | BMW’s mainstay premium lineup was almost unchanged, but its overall sales dropped as its Mini brand faltered. |
| Mr. Fuss said a crucial question in the new year would be whether President François Hollande’s new economic policy initiatives would bring down the French jobless rate and reinvigorate a market that shrank by 5.7 percent in 2013. | Mr. Fuss said a crucial question in the new year would be whether President François Hollande’s new economic policy initiatives would bring down the French jobless rate and reinvigorate a market that shrank by 5.7 percent in 2013. |
| Philippe Houchois, head of European auto industry research at UBS in London, said it was hard to say just how much of the year-end demand reflected artificial support and how much was real demand. | Philippe Houchois, head of European auto industry research at UBS in London, said it was hard to say just how much of the year-end demand reflected artificial support and how much was real demand. |
| “We don’t really know how healthy the market is,” Mr. Houchois said. But with annual sales 24 percent below the 2007 peak, he added, “it has probably shrunk enough.” | “We don’t really know how healthy the market is,” Mr. Houchois said. But with annual sales 24 percent below the 2007 peak, he added, “it has probably shrunk enough.” |
| Mr. Houchois said that the biggest potential recovery was in countries like Spain and Italy that had been particularly hurt by the financial and sovereign debt crises and where demand had fallen the most. If they bounce back, he noted, that would benefit companies like Renault and Peugeot that sell the types of cars that are most popular there. | Mr. Houchois said that the biggest potential recovery was in countries like Spain and Italy that had been particularly hurt by the financial and sovereign debt crises and where demand had fallen the most. If they bounce back, he noted, that would benefit companies like Renault and Peugeot that sell the types of cars that are most popular there. |