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European car sales fall as economy struggles

car-manufacturingThe number of new car registrations in Europe continued to fall in June, braking hopes they had already reached rock bottom after a year of losses. June’s sales were the lowest since 1996, but were marginally better than a 5.9% slide in May to the lowest level for 20 years, a slump that has seen traditional volume manufacturers post billion-dollar losses and sparked a series of factory closures.

Registrations fell 5.6% in June to 1.13 million passenger cars, leading to a 6.6% decline in the first 6 months of 2013, according to data published Tuesday by industry association ACEA. Registrations in June were almost 25% lower than six years ago. The UK automobile industry was again the only large market to post a rise in new registrations, with a 13.4% rise compared with May last year, according to data from the same agency.

Among the major manufacturers, Fiat SpA had the weakest performance last month with an almost 13% decline in registrations. Registrations of already struggling PSA Peugeot Citroen fell 11%. Those of General Motors Co. sank 9.9%, while Nissan Motor Co. suffered a 12% drop.

Ford, which has followed a restructuring initiative that involves closing three European factories, was the only major brand to see sales rise in June, recording an 8.1% rise in new registrations. Renault’s low-cost Dacia brand continued to post healthy growth, with a 17% rise in sales.

As economy is experiencing sluggish growth and high unemployment, demand of new cars stays low. Executives and analysts expect sales across the EU’s car market to continue falling in 2013, prolonging a slump that began after the global financial crisis happened.

On the positive side, research firm LMC Automotive said in a recent publication that car sales in June appeared to be “more solid” if adjusted for seasonal swings, but on a yearly basis it still remains negative.

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