FRANKFURT (MNI) – New car registrations in the Eurozone fell in
both July and August, the Association of European Automobile Builders
(ACEA) reported on Tuesday, adding to evidence that consumers are less
willing to make big-ticket purchases in the current economic
environment.

From June’s 913,738 units, the number of cars registered slipped
22.4% to 710,592 in July and fell an additional 22.2% to 550,872 in
August. In annual terms, the shortfall widened to 11.0% in July before
easing to 9.7% last month.

Car sales are likely to remain subdued in the coming months, as
jobless fears hit a two-year high and consumer sentiment remains weak.

With unemployment at 11.3%, Eurozone consumer goods production
continued to trend downward in July, reaching a three-month low on
further weakness in durable goods output.

“Obviously, people are concerned about losing their jobs, concerned
about the euro crisis, about their personal financial situation,” said
ING senior economist Martin van Vliet. The drop in consumer durables “is
fully consistent with the weak economic backdrop we’re seeing in the
Eurozone as a whole.”

German new car registrations fell 4.7% on the year in August to
226,455. July’s decline was a modestly sharper 5.0% y/y, to 247,860
units.

Positive employment trends and recent wage gains should continue to
support German household consumption. However, consumers’ willingness to
spend may have already reached its peak; the GfK Group’s buying
propensity indicator has fallen under the weight of deteriorating income
and economic expectations.

In France, the number of registered cars fell 11.4% to 96,067 in
August compared to July’s 7% annual decline to 148,924.

French carmakers expect sales to fall by as much as 13% this year,
equivalent to 60,000 to 100,000 fewer registrations, according to the
sector media group AutoK7. Inventories of unsold cars are piling up in
factories and dealerships.

While surveys by Insee point to stability in consumers’ plans to
buy a car in the coming year, other surveys show a sharp drop in
domestic orders of late, more than offsetting a recovery in export
orders.

Italian registrations amounted to 56,447 units in August, down
20.2% y/y following July’s 21% drop to 109,452.

Unable to sustain an upward trend, Italian consumer confidence fell
in August amid weaker economic sentiment and high – albeit stable –
jobless fears.

In Spain, registrations managed a modest 3.4% y/y rise to 48,820 in
August after plummeting 17.2% in July to 65,322.

A record-high proportion of households in Spain were not looking to
make any significant purchases in the next year, a European Commission
survey showed last month. With more than a quarter of Spaniards still
out of work and households’ financial outlook deteriorating further, an
improvement in buying propensity appears to be a long way off.

Among smaller Eurozone states, the sharpest fall was noted in
Greece, where 46.7% fewer vehicles were registered compared to one year
ago. Conversely, Slovakia led the way in gains with a 14.6% annual bump
in registrations. Data for Malta was not available.

— Frankfurt bureau: +49-69-720 142; email: frankfurt@mni-news.com

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