New car sales stalling across Europe

WHILE MG Rover may be in the last chance saloon other European car makers have seen sales drop amid increasing evidence of overcapacity and economic uncertainty that is leading consumers to hold off purchasing new cars.

Figures out today show that sales of new cars across Europe were down 4.7% in the year to March. And even the most robust manufacturers have seen declines ? Ford sold 4.3% fewer cars than it did a year ago, General Motors was 2.4% adrift and sales of Volkswagen cars were 2.1% lower.

PSA, which comprises Peugeot and Citroen, saw registrations drop 9% and Fiat was down 16.7%. BMW alone managed to buck the trend, with sales of its cars 7.5% stronger, according to the European automobile association Acea.

The association said European registrations of new cars in March fell to 1.71m from 1.79m. It blamed the slugish European economic environment and pointed to the early Easter for depressing sales in March.

Ford's shock profits warning on Friday reflects the fact that car makers are having an increasingly tough time in Europe. Industry analysts say that over capacity is the main problem ? car companies are producing too many models and there aren't enough consumers willing to buy.

Figures from the Society of Motor Manufacturers and Traders last month revealed a drop across the board in the UK. Total sales were down 5.1% and sales to private consumers were 10.5% lower. The figures are, however, set against strong sales a year ago and, according to the car makers, last month was still the second-strongest March on record.

But there is little disguising the extent of the downturn for Rover. The SMMT's figures show exactly why the British car maker collapsed after racking up huge monthly losses - sales of new Rovers were down by almost one third in the 12 months to March, 28.5% adrift on a year ago.

Speculation that manufacturers from the Far East are taking share away from the European car makers was only partly borne out by Acea's figures. Kia saw an 85% jump in year-on-year registrations, with its market share growing to 1.5% from 0.8%. But Nissan registrations were 4.4% lower, Hyundai were 5.8% adrift and Mazda's dropped 9.5%. Honda was also down, 4.6% lower, and Toyota registrations slipped 1.4%.