Europe Auto Sales Lowest Since '94

Auto sales in Europe have slumped to their lowest pace in 18 years and they may not improve anytime soon.


Two sobering headlines from Ford and Volkswagen as the automakers reported first half sales in Europe. Ford has already warned that its second quarter losses from international operations will triple and the majority of that weakness is due to lower sales in Europe.

In the first half of this year Ford sales in Europe dropped 10 percent, with the slowdown being especially noticeable in June when sales dropped 16.1 percent. In France, Italy and Spain Ford saw big declines in sales, while Germany (the largest auto market in Europe) was flat.

"The economic environment remains very difficult”, said Roelant de Waard, Ford of Europe's sales chief.

With much of Europe sliding back into a recession auto sales have dropped to the lowest level since 1994. Compounding the problem for automakers is a price war in the industry that is cutting into already squeezed margins.

The troubling news for investors is that sales in Europe may not get better anytime soon. Volkswagen released first half sales that showed a slight gain overall (up 1.8 percent) in Europe. The German automaker warns that it’s not getting euphoric about those results given the weakness in Europe. “The economic situation, particularly in Western Europe, remains tense and difficult”, Group Board Member for Sales Christian Klingler said in Wolfsburg on Friday.

Europe represents about 22 percent of the global auto sales. As business in Europe has slowed, the losses for automakers have accelerated.

On Thursday, French automaker Peugeot announced it would close an assembly plant and cut approximately 8,000 jobs. Friday, Moody’s said it would review Peugeot’s debt rating.

-By CNBC's Phil LeBeau

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Former Kleiner partner Ellen Pao arrives at San Francisco Superior Court, March 24, 2015.

    Ellen Pao’s lawsuit against her former employer, Silicon Valley VC firm Kleiner Perkins, is frivolous—and a setback for women, says Carol Roth.

  • A pedestrian walks by a Lululemon retail store on September 12, 2014 in San Francisco, California

    It looks like Lululemon has learned a lesson from its past controversies, and is working to develop merchandise to fit a fuller-figured customer.

  • Beer Label Madness 2015 - South - Yule Shoot Your Eye Out

    As voting gets underway in Round Two of CNBC's most loved beer label contest, here's a look at those that prevailed in Round One.

U.S. Video