European car sales drop to record low

Ford, PSA Peugeot Citro├źn and Toyota were the biggest strugglers as European car sales slumped to a record low in the first month of 2013.

The European Automobile Manufacturers' Association (ACEA) has revealed sales were down 8.5% in January, while registrations dropped to 918,280 new cars.

The industry body stated it was the least activity seen in January since the inception of its records in 1990 - although the British market actually grew 11.5% in the corresponding period, unique among the "big five" national markets (Germany, Great Britain, France, Italy and Spain).

Ford was by far and away the worst performing major carmaker last month, enduring a 26% sales fall to 61,544 vehicles. Peugeot and Toyota also suffered in January, recording dips of 16% each.

It is a worrying start to the year in terms of demand, which dropped to its lowest point in 17 years in 2012. European car demand is predicted to decline even more over the next 12 months, with brands left to contend with excess stock and damaging pricing.

The majority of carmakers expect the regional market to contract between 3% and 5% in 2013.

The outlook goes against predictions of a turnaround in fortunes for the eurozone reaching the car industry. It appears it still has some way to go on its road to recovery.

Germany epitomises the struggles facing the industry. Europe's biggest car market emerged from 2012 relatively unscathed but is now on the way down at a fast rate. It posted an 8.6% dip in sales in the opening month of 2013.

Volkswagen shrugged off weak demand on home soil to enjoy a rise in European sales. However, it did see a 5.5% drop in registrations last month, although it was less dramatic than the decline in the market in general. Audi posted an even more modest dip, at only 2.1%.

Elsewhere in Germany, BMW saw sales increase by 9.4% and Daimler's Mercedes-Benz enjoyed a 4.7% rise.

Registrations were up 7.7% for South Korea's Kia, while partner Hyundai posted a sales drop of only 2.2%.

Fiat Group, based in Italy, recorded a drop of 12.4% in sales, in contrast to a decline of just 4% for the carmaker's namesake brand.

Despite Fiat chief executive Sergio Marchionne's aim to build his recovery strategy around the upscale Alfa Romeo marque, European sales of the car dropped by a worrying 37% in January.

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