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Economy in Brief

Euro Car Registrations Jump In June But Are Quashed In Quarter
by Robert Brusca July 16, 2010

Total car registrations in EU jumped by 9.8% in June. Even so, for the quarter 'sales' are off at a nearly 20% annual rate and the same is true for the three month growth rate. For 2010-Q2 only the UK and Italy have small positive contributions to growth from auto registrations. For the other large EMU nations auto registrations are falling in the quarter at annual rates ranging from -11% to -36%. Germany is on the high end of those statistics (-11%) and Spain on low end (-36%).

Auto registrations fell steeply in the recession/financial crisis. Many countries adopted stimulus plans of various sorts to aid the auto sector. Now, in the aftermath of those programs, sales are not able to sustain momentum. Apparently the help-programs shifted demand ahead borrowing sales from the future much more than they actually stimulated any purchases that otherwise would not have occurred.

Now the elevated sales levels of the past that were helped by various government incentives become higher hurdles to compare with today's selling rates.

EU car registrations have fallen in six of the past 12-months. 'Sales' are down by 10.7% Yr/Yr. At a minus 33.2% Yr/Yr Germany has the steepest decline in registrations. At +24% Spain's Yr/Yr gain is the largest among the large countries.

Weakness is not a just legacy phenomenon. Despite the 9.8% rise in registrations in June, May saw registrations drop by 2.6% and April saw them fall by 11.4%. The largest EU-EMU countries have clearly negative three-month rates of growth. While other measures of consumer spending have showed some signs of life, Car registrations remain mired in weakness. They will hold back growth in Q2. They seem to be a manifestation of weak consumer sentiment despite ongoing strength in the European industrial recovery. Like in the US the service sector in Europe has been struggling and that sector is a key one for job growth and for confidence. Car registrations are one of the places that Euro-weakness appears most clearly. And the car sector is important.

EU Car Registrations
  Month-to-month Saar
  Jun-10 May-10 Apr-10 3-Mo 6-MO 12-Mo
EU Total 9.8% -2.6% -11.4% -19.4% -18.5% -10.7%
From 3Mo Moving Avg -1.9% -3.3% -0.2% -19.7% -27.0% -11.5%
Country detail
Germany 0.8% 0.8% -3.8% -8.7% -2.1% -33.2%
France 2.5% 0.6% -7.6% -17.7% -40.5% -5.4%
Italy -2.0% 0.5% -25.8% -71.4% -46.6% -21.2%
Spain -5.9% 8.8% -9.3% -25.8% 24.4% 24.0%
UK -9.1% 5.6% -17.0% -59.8% -48.1% 6.2%
All SA France also working day adjusted
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