Passenger car registrations in Europe dropped sharply in May and hit the lowest level recorded for the month in twenty years, as the region's ongoing recession continued to weigh on sentiment, dragging demand for many leading car brands. The data has dealt a fresh blow to manufacturers' hopes of the sector recovering from the downtrend.
Demand for passenger vehicles contracted in most of the major European economies, expect the UK, amid the deepening recession in the euro area, the longest in its history, which continued to drag economic activity and weaken the employment market.
A survey by the European Automobile Manufacturers Association, or ACEA, Tuesday showed that sale of new passenger cars in the European Union decreased 5.9 percent on an annual basis to 1,042,742 units in May, which was the lowest level recorded for the month of May since 1993, when sales dropped below one million.
The overall slump in demand reflected a 9.9 percent fall in Germany and a 10.4 percent decline in sales in France. New registrations were lower by 8 percent and 2.6 percent, respectively in Italy and Spain.
Meanwhile, the UK recorded 11 percent growth in new car sales, the only country to log positive growth during the month.
Among leading carmakers, sales of General Motors brands fell 11.3 percent from May 2012, and those of the Volkswagen Group dropped 2.8 percent. Demand for cars made by the FIAT Group and BMW declined by 10.8 percent and 7.2 percent, respectively.
During the five months ended May, car sales fell 6.8 percent to 5,0,70840 units from the corresponding period a year earlier.
Data released by the Eurostat earlier this month showed that overall industrial activity in European nations that use the euro as the common currency increased at a slower rate in April. But, the outcome defied expectations for a decline, giving rise to hopes that the region is slowly recovering.
The European Central Bank left its key interest rate unchanged at 0.5 percent this month, as policymakers took a wait-and-watch stance after last month's quarter-point reduction, which was the first rate-cut in nine months.
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