France and Japan posted steep falls in December car sales on Monday, adding to a swathe of depressing data from an industry bearing the brunt of wrecked consumer confidence, as analysts and a trade body forecast further pain in 2009.
A 15.8% decline in France and a record 22% drop in Japan chimed in with December falls announced last week in Italy, Spain and Belgium, extending the downturn of recent months as the fragile economic environment continued to impact both lenders offering credit for new vehicles and would-be buyers.
“I expect we'll continue to see double-digit declines (in sales) across Europe for the first part of 2009,” said Credit Suisse analyst Stuart Pearson. “But that won't really surprise people.”
Automakers across the globe are struggling to reduce stocks of unsold vehicles, and many have resorted to temporary site closures, job cuts and extended holidays for workers. Citigroup analysts said that, in Europe, they were basing 2009 forecasts on a further 15% decline in sales. “No earnings/no dividend is likely to be a common autos tune in 2009,” they said in a research note.
In Japan, industry association JADA said the country's worst-ever December for auto sales excluding 660cc minivehicles, which left 2009 unit sales at 5.08 million, suggested already grim predictions for 2009 would have to be revised.
Last month, JAMA had projected a fall in demand for new automobiles to 4.86 million vehicles this year -- the first drop below 5 million in 31 years - but even that projection had not taken into account the extent of the slide in December, association Director Takeshi Fushimi said.
“We never expected sales would fall this badly,” he told reporters.
Sales of non-mini vehicles at the world's biggest carmaker, Toyota Motor Corp, fell 17.8% in December, while Nissan Motor Co fell 21.8% and Honda Motor Co retreated 25.3%.
Toyota-branded car sales fell for the fifth straight month.
Sales in France did little better, but they still outperformed Spain, which last week announced a 49.9% fall in December and a 28% drop for the year as a whole, their sharpest ever annual decline, Spanish industry group ANFAC said.
Italy, Europe's fourth biggest market, after France, Germany and the United Kingdom, posted a 13.3% drop for December on Friday.
German data are due later this week.
France's December decline was “not too bad,” Pearson said, as December 2007 sales got a temporary boost before the January introduction of an incentive scheme to encourage drivers to buy cleaner vehicles.
The main surprise was that Renault, with its newly-launched version of the best-selling Megane, performed worse than PSA Peugeot Citroen, he said.
France's biggest automaker, PSA Peugeot Citroen posted a 0.9% decline in sales in December, while Renault saw a 19.9% drop.
Shares in the two French car manufacturers were the second and third biggest fallers on the CAC-40 in 2008. Renault lost 80.9% and Peugeot 76.6%.
European governments and the European Commission have pledged to help the ailing industry, which in Europe employs 2.2 million people directly and a further 10 million in related industries and services. (Reuters)