Sept. car sales down 10.4% in w. Europe; no recovery seen

[NINETY EIGHT REGENCY]

Sept. car sales down 10.4% in w. Europe; no recovery seen

Paul McVeigh

New-car sales in western Europe fell by 10.4 percent in September, according to J.D. Power Automotive Forecasting.

The UK-based market researchers now expect a 6.4 percent decline to 12.8 million in the region's car sales this year, followed by a 1.8 percent drop to 12.57 million next year as government austerity measures dampen large consumer purchases.

"The market continues to compare poorly year-on-year to a 2009 market that was inflated by government scrappage incentives," J.D. Power said in a statement.

The company said an annualized selling rate of 12.4 million is weak by historical standards -- western Europe's car sales reached a high of 14.8 million in 2007 -- "but at least it is an improvement on the past few months."

In Germany, sales fell by nearly 18 percent last month with the year-to-date market down by 27.5 percent. "The selling rate in Germany remains below 3 million units a year, highlighting that the German consumer remains cautious even though the economy has been performing well recently," J.D. Power said.

The French market saw an 8 percent drop for September. France is the only major market in the region with a scrappage scheme in place, although it is being phased out.

Car sales in Spain declined by 27 percent, hit by the ending of scrappage support and a VAT rise.

The Italian market was down 19 percent while UK car sales fell 9 percent in an important month when sales are normally inflated by the introduction of new registration plates.

Sales will continue to decline in the remaining months of 2010, J.D. Power said, adding "we do not expect that 2011 will beat the 2010 market."

Uncertainty continues over the impact of the austerity measures now being adopted by European governments and because of continuing sovereign debt worries. "The risk of a double-dip recession certainly cannot be overlooked," the forecaster said.

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