European car sales crash, auto crisis

Car sales in the crisis-stricken EU have slumped for the eighth month in a row, compounding the woes of the continent's troubled carmakers. Lucky are those who can rely on overseas profits. European car markets continued their downward slide in May, tumbling by 8.7 percent year-on-year down to 1.1 million vehicles sold in that month, according to the latest figures released by the European Automotive Industry Association (ACEA) Friday. Recording the eight consecutive month of declining car sales in Europe, ACEA said the pace of the slump had accelerated after the number of new admissions had decreased by only 6.9 percent in April. Unsurprisingly, car sales plunged most dramatically in Greece, where 47.3 percent less cars were bought in May, compared with the same month a year ago. In crisis-hit Spain and Italy, sales declined by 8.2 percent and 14.3 percent respectively, while the French car market took an unexpectedly strong hit, contracting by 16.2 percent. The German car market wasn't able to escape the impact of the eurozone debt crisis either, reporting a slide by 14,500 vehicles to a total of 289,977 - down 4.8 percent. Overseas fortunes According to ACEA, French automaker PSA Peugeot Citroen suffered the sharpest decline at minus 19.5 percent. The French were followed by Opel/Vauxhall - the European subsidiary of US auto giant General Motors (GM) - which saw sales plunge by 12.3 percent in May. Opel's figures will fuel a heated debate about GM's production overcapacity in Europe, and raise fears of imminent factory closures in Germany as the US mother seeks to restructure its Europe business. In addition, Asian low-cost manufacturers Hyundai and Kia are gaining ever bigger shares of the European car market, after selling 7.0 and 30 percent more cars respectively in May. The figures presented by ACEA show that German luxury carmakers BMW and Daimler, but also mass-market manufacturer Volkswagen, were able to largely compensate losses in Europe with rising sales overseas. They successfully tapped into a rising auto market in China, which jumped 28 percent in May to 1.1 million vehicles, as well as into a rebounding US market, which grew by a quarter to 1.3 million newly registered cars.