EU March New Car Registrations Fall 10.2% on Year

(This article was originally published earlier Wednesday.)

By Gilles Castonguay

MILAN--New car registrations in the European Union fell for the 18th month in a row in March, down 10.2% to 1.3 million units, according to industry figures published Wednesday in the latest reminder of the severity of the crisis besetting the region and its car makers.

It was the second-biggest drop this year after February, when registrations, a proxy for sales, fell 10.5%, according to figures from ACEA, an industry body based in Brussels.

For the first three months of the year, registrations totalled 3 million units, down 9.8% from the same period the previous year.

Of the 27 member countries of the EU, the United Kingdom was the only major market to show any resilience in March, its registrations rising 5.9% to 394,806 units. The sterling's strength against the euro and windfall payouts consumers received from financial institutions in compensation for missold products have encouraged car purchases in recent months.

Other countries such as France and Germany, meanwhile, suffered double-digit drops in March.

EU sales have fallen to near 20-year lows as many of the region's governments have adopted austerity reforms to confront the debt crisis, discouraging consumers from making big purchases.

This has led France's Renault SA (RNO.FR) to call on governments to consider ways to stimulate their economies, such as another round of car-scrapping incentives.

Car makers with a big exposure to the EU market have been cutting costs, idling production lines, eliminating jobs and looking beyond Europe for new customers in markets like China and the U.S. where demand is healthy.

Although the region's major manufacturers including Volkswagen AG (VLKAY, VOW.XE) of Germany suffered drops in March, France's PSA Peugeot-Citroen SA took the biggest fall, with sales falling 16% to 135,833 units.

Fiat SpA (F.MI), meanwhile, had the smallest drop, down 0.8% at 79,269 units.

Although mass-market manufacturers like Fiat and PSA have taken most of the brunt of the crisis, German premium brands have started to feel it as well despite their relative immunity to downturns.

Registrations at BMW AG (BMW.XE) were down 4.7% at 86,251 units and those at Daimler AG (DDAIY, DAI.XE) fell 1.2% at 70,857.

Daimler has put its profit outlook for the year in doubt as the maker of Mercedes-Benz cars struggles to revive its lagging sales and profitability.

Write to Gilles Castonguay at [e-mail]

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