Peugeot lost market share as European car market fell 5%

European car sales fell 5% last month, the Association of European Carmakers said on Tuesday, as PSA Peugeot Citroen lost more ground to premium and Asian rivals.

Registrations of new passenger cars slumped by 5% in August after a 5% increase in July that could be contributed to the slow holiday month. Sales slid further in France, Italy and Germany, taking the European decline in new registrations for January-August to 5.2%.

“Downturn prevailed across significant markets,” the association said in a statement, with the UK alone posting strong growth of 10%.

Automotive forecasters and industry executives are hoping desperately to see European auto demand bottom out and stabilize after what is set to be a sixth straight year of declines to a two-decade low.

The August contraction was in line with the 5.3% combined western European sales decline announced by national industry bodies earlier in the month.

Paris-based Peugeot led the fall, with an 18% drop in registrations that eroded its market share to 11% for the first eight months, down almost a percentage point year-on-year.

Italys Fiat dropped 4.9%, in line with overall demand. Market leader Volkswagen fell 11%, weighed down by declining sales at its namesake brand. VWs German luxury peers have increased their sales, partly at the expense of European volume brands.

BMW registrations jumped 9.9% in August and were little changed for the first eight months, lifting the groups market share for the period.

In contrast to those declines is the 0.5% gain for Daimler, triggered by Mercedes-Benz sales that rose 8.5% in August and 5.5% for the year so far. VWs Audi, the weakest European performer of the three German premiums, still increased share in January-August with a 3.6% dip in sales, less than the market decline. August registrations were down 6.4%. Renault also halted the trend with a 5.8% gain in August and a modest 2.2% decline for the first eight months, saved by strong sales of its Dacia stripped cars. South Koreas Hyundai and affiliate Kia, whose combined deliveries fell 4.7% last month, have also won business from their European mass-market rivals.

“What were seeing right now in the European car industry is a squeezed middle,” Hyundai Europe chief Allan Rushforth said in an emailed statement cited by Reuters.

“German premium brands are coming down through the market while Hyundai is moving up (and) making life very difficult for European volume brands rooted in the mainstream.”