Ford, Fiat Lead European Car Sales Fall on Volume Brands’ Drop

Ford (F) Motor Co., Fiat SpA (F) and Toyota Motor Corp. (7203) led a ninth consecutive monthly drop in European auto sales as mass-market carmakers continued to suffer from the end of governments’ car-scrapping incentive programs.

Ford’s registrations plunged 26 percent from a year earlier in December, while Fiat’s sales plummeted 19 percent and Toyota’s dropped 7.6 percent, the Brussels-based European Automobile Manufacturers’ Association said today. Demand in the region fell 2.7 percent to 1.05 million vehicles after governments last year ended scrappage subsidies put in place to aid the auto industry during the recession.

“The scrappage incentive schemes have now run their course and because of that the volume makers are going to find it relatively more difficult in 2011,” Jonathon Poskitt, an Oxford, England-based analyst with J.D. Power & Associates, said before the release. “The non-premium players will fare worse than the 2 percent decline we forecast for the full market including the premium makers in Europe.”

Full-year sales in the European Union plus Iceland, Norway and Switzerland declined 4.9 percent to 13.8 million cars.

December registrations rose 6.9 percent in Germany, Europe’s biggest market, helped by gains at premium makers Bayerische Motoren Werke AG (BMW) and Volkswagen AG (VOW)’s Audi luxury brand. Europewide sales by Wolfsburg, Germany-based Volkswagen fell 1.3 percent, led by an 8.8 percent slide for VW-brand mass-market vehicles.

Largest Markets Decline

Registrations fell in all of Europe’s other top markets of France, Italy, Spain and the U.K. in December. French registrations decreased 0.7 percent, weighing on Paris-based PSA Peugeot Citroen (UG), whose sales in Europe fell 6.3 percent.

Peugeot, Europe’s second-largest carmaker after Volkswagen, said yesterday that it expects the region’s auto market to stabilize in 2011. The company should benefit from the introductions of the Peugeot 508, the 3008 Hybrid4, the Citroen DS4 and later the DS5, it said in a statement.

France’s incentive program ended last month after being trimmed in July to 500 euros ($670) per traded-in car from 700 euros in the first half and 1,000 euros in 2009.

Ford started selling a new version of its C-MAX wagon and will offer an overhauled version of the Focus compact in the first quarter. The Dearborn, Michigan-based carmaker said yesterday it’s introducing “at least 20 new products and derivatives” in Europe in the next three years.

Ford Europe Chief Executive Officer Stephen Odell said the carmaker would refrain from trying to boost volume or market share through “widespread and excessive incentives” as that would hurt its business.

“The carmakers exposed to the western European mass market will experience increasing pricing pressure and higher raw material costs” in 2011, London-based Credit Suisse analyst Arndt Ellinghorst said in a phone interview yesterday. “It’ll be the second year in a row that European mass-market players are falling further behind the much more profitable and cash-generating premium makers.”

To contact the reporter on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.

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