Europe’s car industry extended a tentative recovery for a second straight month, leaving manufacturers and dealers hoping state subsidies will help spur a stronger rebound.
New passenger-car registrations fell 24% in June, the European Automobile Manufacturers Association said Thursday. That’s an improvement on May’s 57% slump and April’s 78% drop.
With sales still well below last year’s levels, hopes are fading for the more V-shaped recovery seen in China. Germany’s Volkswagen AG on Tuesday sought to temper optimism, telling workers in a staff newspaper that it’s put a freeze on new hiring despite a pick-up in orders.
“The recovery is slow but not quite as slow as we thought,” Bankhaus Metzler analyst Juergen Pieper said in an email. “It looks like July could be the first almost-normal month.”
Auto manufacturers across Europe have been cutting costs and jobs to defend profit margins. Daimler AG needs to cut more than the 15,000 posts originally planned, its head of human resources told German news agency DPA last week.
Governments are meanwhile trying to entice customers back to showrooms with incentives for environmentally friendly cars. Lease prices for some battery-powered cars have plummeted and the subsidies have helped boost the share of automakers’ share of orders for battery-powered models.
France’s sales rising 1.2% — the first rise since the pandemic started — after the state introduced incentives at the beginning of June. Most other countries in the region, including Germany, Italy, Spain and the U.K., still saw double-digit declines.
Globally, car sales are recovering as economies exit strict lockdowns. The China Association of Automobile Manufacturers said last week that the outlook for this year is improving, predicting a drop of 10% to 20% for the year. In Europe, car sales are expected to fall 20%, according to a forecast by Bloomberg Intelligence.
–By Oliver Sachgau (Bloomberg)
