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European auto sales rise at slowest rate in year on economy

A specialist prepares for the day's trading on

A specialist prepares for the day's trading on the floor of the New York Stock Exchange in October. Car companies like Fiat Chrysler Automobiles NV have had to cut prices in Europe due to slow sales. Credit: AP / Richard Drew

European car sales increased at the slowest pace in a year in November as waning economic growth discouraged customers from making purchases, prompting automakers including Fiat Chrysler Automobiles NV to cut prices.

Registrations rose 1.2 percent to 989,457 vehicles last month from 977,607 a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today. Eleven-month sales gained 5.5 percent to 12 million cars.

“It’s not very dynamic,” Thomas Besson, a Paris-based auto analyst at Kepler Cheuvreux, said by phone. “We’ll probably have growth of around 5 percent in 2014, which is higher than what was expected at the start of the year, but it’s no party time.”

A slowing European economy has taken the steam out of a rebound in the region’s auto market, which fell for six years to a two-decade low in 2013. The European Central Bank earlier this month reduced its growth forecast for the countries using the euro, and ECB President Mario Draghi said high unemployment is holding back a recovery.

That led car dealers in Germany, Europe’s biggest economy, to deepen price cuts last month, with FCA’s Italian brand Fiat offering 18 percent average discounts, according to trade magazine Autohaus PulsSchlag. The average industrywide incentive jumped to 12.7 percent off the sticker price from 11.8 percent in October.

Nissan Growth

Among the top 10 carmakers selling vehicles in Europe, Yokohama, Japan-based Nissan Motor Co. and Munich-based Bayerische Motoren Werke AG posted the biggest gains last month. Three of the five largest auto markets expanded, with increases of 17 percent in Spain, 8 percent in the U.K. and 5 percent in Italy. Demand fell 1.8 percent in Germany and 2.7 percent in France.

“The U.K. is reaching a ceiling, growth is slowing down in France and Germany, and Italy is slowly coming back: this isn’t a great cocktail for 2015,” said Philippe Houchois, a London- based auto analyst for UBS Ltd. Even with ECB pursuing stimulus measures for the region’s economy, “there’s still a lack of buyers.”

The ACEA’s figures comprise statistics from the 28 European Union countries, excluding Malta, as well as Switzerland, Norway and Iceland. November marked the 15th consecutive month of growth, the longest set of gains since the ACEA began compiling registration figures in 1990.

GDP Contractions

The 18-nation euro area’s unemployment rate is 11.5 percent after reaching a record 12 percent in 2013. German and French gross domestic product contracted in the second quarter of this year, while Italy’s economy shrank in the six months through September.

BMW’s namesake luxury brand, whose newest models include the 4-Series coupe, X4 sport-utility vehicle and van-like 2- Series Active Tourer, posted an 8.6 percent increase in European sales last month. The Mini division, which is offering an updated hatchback, boosted registrations 13 percent.

Daimler AG’s Mercedes-Benz marque, which ranks behind BMW and Volkswagen AG’s Audi nameplate in worldwide premium-vehicle sales, delivered 8.4 percent more cars in Europe, pushed by new versions of the top-end S-Class and mid-size C-Class sedans.

Volkswagen, Europe’s biggest carmaker, registered 2.5 percent more autos in the region. Demand at the Wolfsburg, Germany-based company’s main VW brand increased 1.3 percent, helped by the Golf compact and Tiguan compact SUV. Audi reported a 3.7 percent gain, bolstered by the new A3 compact sedan.

Jeep’s Surge

Group European sales by FCA, the London-based carmaker created from the merger of Fiat and U.S. auto producer Chrysler, increased 3.6 percent in November as demand doubled at the Jeep SUV nameplate, more than making up for declines at the other main divisions.

The namesake brand of Renault SA, based in the Paris suburb of Boulogne-Billancourt, sold 1.1 percent more cars in Europe as a new version of the Clio hatchback and the Captur urban crossover won buyers. The Dacia marque’s registrations increased 11 percent on the Duster sport-utility vehicle and Sandero hatchback.

Growth in the European market was held back last month by declines of 12 percent at General Motors Co., which is pulling the Chevrolet brand out of the region, 5.5 percent at U.S. auto producer Ford Motor Co. and 2.9 percent at Paris-based PSA Peugeot Citroen, Europe’s second-biggest carmaker.

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