European car sales fall due to stagnant economy
European Automobile Manufacturers Association (ACEA) disclosed that European car sales amounted to 1.05 million units in February 2005, down 4.1% from 1.1 million units sold in February 2004. Rising unemployment, higher fuel prices and stagnant economic growth discouraged consumers from making large purchases. Vehicle sales in the first two months of 2005 dropped 2.3% year-on-year, from 2.33 million units to 2.27 million units. Record unemployment levels in Western Europe restricted consumer spending and hampered economic expansion. Plus, a 30% increase in oil prices since the beginning of the year imposed additional costs on companies and consumers in Western Europe. In Germany, the Euro zone's largest economy, February figures show that 5.22 million people are unemployed. European economic growth unexpectedly slowed in the fourth quarter of 2004 as Germany, the region's largest economy and biggest car market, contracted for the first time in more than a year. France is the only country among the five main markets to report an increase (3.1%) in February sales. The UK (-15.7%), Italy (-5.5%), Germany (-2.3%) and Spain (-0.7%) all posted losses. Italian automaker Fiat's market share fell from 9.3% in February 2004 to 8% in February 2005 as sales dropped 17% to 84'500 units. The market share of France's Renault's slipped a full point to 10.2% as sales dropped 13% to 107'087 units. Sales at Volkswagen AG, Europe's largest automaker, fell 3.5% to 192'762 units. DaimlerChrysler's sales fell 9.6% to 54'992 units. Toyota Motor Corp, the world's second-largest automaker, saw a 9.6% drop in European sales. The Japanese carmaker sold 56'220 units, reducing its market share from 5.7% to 5.4%. European sales of General Motors Corp, the world's largest carmaker, rose 2.9% to 109'969 units, and its market share increased from 9.8% to 10.5%. However, Ford Motor Co.'s sales dropped 5.1% to 106'723 units, and its market share declined from 10.3% to 10.2%.