Photographer: Kostas Tsironis/Bloomberg

European Car Sales Growth Cools as VW, PSA Lose Market Share

  • Deliveries rose 2.1 percent to 1.1 million vehicles, ACEA says
  • PSA, Opel combined market share shrank to 16.9 percent

European car-sales growth cooled in February as political uncertainty clouds the area’s economic outlook and the market becomes increasingly saturated after three years of expansion.

After a 10 percent jump in January, industrywide registrations rose 2.1 percent to 1.1 million vehicles last month, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said Thursday. Regional leader Volkswagen AG and No. 2 PSA Group sold fewer cars and lost market share to competitors including Fiat Chrysler Automobiles NV and Renault SA.

While European Central Bank President Mario Draghi said this month that the euro-area’s cyclical recovery may be gaining momentum, fourth-quarter data showed the economy is expanding more slowly than expected, highlighting the region’s fragility. The U.K., Europe’s biggest auto market after Germany, posted a 0.3 percent dip in sales in what may be the start of a Brexit-induced slowdown.

With demand set to flag and the U.K.’s exit from the European Union adding to economic doubts, the region’s carmakers are bracing for tougher times. Fiat is planning to shift production of the Panda city car from Italy to low-wage Poland. PSA agreed this month to purchase General Motors Co.’s Opel division to spread costs across a wider network to help weather the transition to an era of self-driving, electric vehicles.

Volkswagen’s European sales slumped 1.5 percent in February, causing its market share to drop to 23 percent from 23.9 percent a year earlier. The manufacturer’s diesel-related troubles have persisted more than a year into the scandal, with Chairman Hans Dieter Poetsch warning that the number of employees implicated in the emissions cheating could rise beyond those identified so far, and German prosecutors conducting a widescale raid at the company’s luxury Audi brand on Wednesday.

Registrations of PSA’s Peugeot, Citroen and DS cars declined 3.1 percent, while future partner Opel slipped 1.2 percent. Combined, the market share of the PSA and GM brands narrowed to 16.9 percent from 17.6 percent, underscoring the competitive pressure in the region.

Fiat Chrysler, whose Jeep Renegade and Fiat 500X have been winning over customers in Europe’s growing sport utility vehicle segment, boosted its market share to 7.9 percent from 7.4 percent. Renault’s updated Captur SUV and Scenic minivan helped it expand to 10.3 percent from 9.8 percent.

Marques that posted gains in February aren’t immune to one of the biggest challenges weighing on the industry: emissions investigations. French media on Wednesday reported the Economy Ministry believes that Renault may have misled customers over how much its models pollute and that management was involved in a fraudulent strategy. The carmaker says it didn’t breach standards and that its autos “are not equipped with cheating software affecting anti-pollution systems.”

Europe’s three biggest markets all posted sales declines in February, typically a weak month. Deliveries fell 2.6 percent in Germany and 2.9 percent in France, where a surge of populism ahead of a two-round presidential election concluding in May is adding to the region’s political jitters. The ACEA compiles numbers from the European Union’s 28 member countries, excluding Malta, plus Switzerland, Norway and Iceland.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE