Employees of ‘Auto Chassis International’, part of French group Renault, protest against job cuts in Le Mans, western France, yesterday. Renault said it would shed 5,700 jobs by 2016.

AFP/London


European auto sales plunged to their lowest point in 17 years in 2012, trade data revealed yesterday after Renault announced the latest job cuts to hit the beleaguered sector.
New car registrations in the European Union fell by 8.2% from their 2011 level to 12.05mn units last year, the European Automobile Manufacturers’ Association said.
Sales in December fell for the 15th month in a row by 16.3% on a 12-month basis, even slipping slightly in Germany despite the global strength of top German brands.
French automakers in particular are being hard hit with Renault announcing 7,500 job cuts late on Tuesday.
PSA Peugeot Citroen, the second-biggest carmaker in Europe after the booming German VW group, has just been rescued by the state. The group is restructuring with 8,000 job cuts and targets development abroad after a government report said its strategy had missed the bus of globalisation.
And yesterday French car parts maker Faurecia reported weak results causing its shares to plunge.
By contrast the VW group has reported record global sales for 2012 with a rise of 11% to 9.07mn units and aspires to being the biggest manufacturer globally, ahead of Japanese Toyota, by 2018. German Daimler said at the Detroit auto show this week that it is on track to be the world’s top luxury carmaker by the end of the decade.
The second-biggest manufacturer globally is General Motors, which struck a strategic partnership with PSA this year, but GM’s sales across the whole of Europe fell by 8.2% last year, the US group said in Detroit.
These companies, and European manufacturers in general, are looking to growth in emerging markets to compensate for what they expect to be a lasting weaker trend in Europe, but these markets are also the home base for new competitors notably in China.
The European trade association said in its report on the European market: “Demand for new cars reached the lowest level recorded since 1995, totalling 12,053,904 units” in 2012.
Last year’s 8.2% shrinkage was the worst since a downturn of 16.9% in 1993, the association said.
The trend was aggravated by exceptionally bad figures for December in debt-stricken Europe.
“In December, new car registrations declined by a sharp 16.3% in the EU, continuing a downward trend commenced 15 months ago. The decline is the steepest recorded in a month of December since 2008,” the statement said.
With the eurozone struggling to cope with the tax rises and cuts in state spending imposed to correct its debt crisis, businesses and consumers have cut down their spending on vehicles.
In some countries the market, and employment, were supported after the financial crisis hit economies in 2008 by government subsidies for the replacement of old vehicles with new ones. But these schemes have run out and many European groups have announced job cuts and plant closures similar to, albeit less dramatic, those that occurred immediately in the US auto industry.
The latest came late on Tuesday from Renault which said it would shed 7,500 French jobs, or about 17.0% of its workforce by 2016, but by means of not replacing normal departures.
Renault, which has diversified its manufacturing into low-cost countries close to western Europe in recent years, notably in Romania where it builds its Dacia-branded vehicles, said that an agreement with unions on the cutbacks would save it €400mn ($534mn) in overheads and would avert any plant closures.
“On the basis of a progressive recovery of the European market, establishing such an agreement would allow for growth in French output that is more sustained than that of the European market,” Renault said.
However the European trade data for the year showed big differences between countries.
Car sales rose only in Britain, by 5.3% from the level in 2011.
In Germany, a fall in sales on the home market was contained to 2.9% but in France sales slumped by 13.9%, in Spain by 13.4% and in Italy by 19.9%.
In terms of brands, sales in western Europe by PSA Peugeot Citroen fell by 12.9%, by Renault 18.9 and by Fiat of Italy by 15.8%.
Sales by Opel, based in Germany but owned by US group General Motors which has recovered strongly from bankruptcy, fell by 15.6%.
However, other German brands did far better. Sales by Audi rose by 3.7%, and by BMW they fell by 0.1% and by Mercedes-Benz by 0.9%.
In terms of sales in Europe by foreign manufacturers, the South Korean group Hyundai-Kia raised sales under the Hyundai name by 9.4% and under the Kia brand by 14.6%.

Toyota, Honda spice up small cars for US market
Japanese automakers are spicing up their compact and subcompact lineups in the US, with Toyota Motor’s Furia concept car hinting at more aggressive styling for the 2014 Corolla and Honda Motor taking subcompact cars to the next level with its Fit-based SUV.
Toyota, Japan’s biggest automaker, gave a glimpse of what the new Corolla, likely to go on sale later this year, could look like when it unveiled the Furia concept sedan this week at the Detroit auto show.
The orange Furia has an aggressive front face with sharply angled headlights and a low centre of gravity, design features that already have been applied to some recent models like the Avalon and the Auris hatchback and could help attract younger buyers.
Honda unveiled a concept urban SUV that will share platforms with the Fit subcompact car.
Honda has been vocal in its emphasis on small cars, aiming to secure a quarter of its global sales with the Fit series by the financial year ending March 2017. The Fit is also known as the Jazz.
Japan’s third-biggest automaker, Honda aims to sell 6mn vehicles globally by March 2017, a jump from the current 4mn, and is set to start selling the remodeled Fit by late 2013 in Japan.
The Fit-based SUV, which will be manufactured in Honda’s new Celaya plant in Mexico as well as in Japan and Asia, is set to go on sale in Japan later this year and in the US in 2014.
Nissan Motor, Japan’s second-biggest automaker, presented the Versa Note compact at the Detroit show on Tuesday. — Reuters