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  On the Punto: Fiat has tipped that European sales will not recover for at least two years.

On the Punto: Fiat has tipped that European sales will not recover for at least two years.

Struggling Italy and Spain set to drag 2012 European sales down to about 12 million

WESTERN European car sales appear to be headed to their lowest annual result for almost 20 years, dragged down by PIIGS that won’t fly – Portugal, Italy, Ireland, Greece and Spain.

A slight rise in June vehicle sales in two of the biggest markets, Germany and Britain, along with a steady performance from France, were insufficient to save Europe from a 2.4 per cent fall in new-car volumes last month – the ninth consecutive monthly decline.

European analysts now expect the Western European market to achieve a tick over 12 million vehicle sales this year, the worst result since the slump of 1993 when sales dived to about 11.2 million in the midst of a global recession.

Sales are running at a lower sales rate than at any time in the global financial crisis, and well under the pre-GFC levels of about 14.8 million.

Light vehicle sales for the first half of this year totaled 6,473,876 units – down 7.2 per cent on the first six months of 2011 – but with the market showing signs of weakening in many countries, the second half of the year is likely to yield fewer sales.

Fiat CEO Sergio Marchionne was quoted by Autonews as saying he did not expect European sales to recover for at least two years.

 center imageLeft: Fiat CEO Sergio Marchionne.

The biggest worry is the state of sales in Italy and Spain, where June volumes fell 24.7 and 12.1 per cent respectively.

Several smaller markets were harder hit, including Ireland, where volumes were down 42.0 per cent, Portugal (-37.0 per cent) and Greece (-31.9 per cent).

France, the second-biggest market behind Germany, had a relatively steady month, with sales down just 0.9 per cent compared with June 2011.

Germany, France and the UK account for more than half of European sales, but if general economic conditions across Europe do not improve, they too might join the sales slump.

German sales were up 2.9 per cent in June, putting the European powerhouse on target for about three million vehicle sales this year.

In the UK, where private buyers are steadying the market, light vehicle sales were up 3.5 per cent, to 189,514 units, indicating annual sales of about 2.1 million.

In Spain, the struggling industry is on track to sell about 710,000 vehicles, compared with 808,000 last year.

To put that in perspective, Spain, with a population more than double that of Australia, will sell only about 70 per cent of the projected volume of Australia’s expected 2012 tally of more than one million units.

The European result would have been worse except for an aberration in the Netherlands, where imminent new emissions rules caused a rush on showrooms and a 53.3 per cent jump in sales bump to 76,813 vehicles in June.

  On the Punto: Fiat has tipped that European sales will not recover for at least two years.

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