By David Pearson, Matthew Curtin and Inti Landauro
PARIS--France's car market shrank sharply again in June,
bringing the decline in registrations of new cars to 9% for the
first half the year, with the country's auto makers' association
warning of only a slight improvement by the end of the year,
contrary to earlier expectations.
The Comite des Constructeurs Francais d'Automobiles said the
French car market will likely contract 8% this year, to its lowest
level since 1997, compared with an earlier forecast of a decline of
roughly half that for 2013.
The weak data underscore the pressure on Europe's mass-market
car makers, most notably France's PSA Peugeot-Citroen (UG.FR), amid
concerns that there is a structural or long-term decline in demand
for new cars in Europe, rather than just a cyclical slump related
to slack economic growth and high unemployment.
Registrations of new Peugoet and Citroen cars fell 9.5% in June,
leaving them down 14% for the first half of the year, and
underperforming cross-town rival Renault SA (RNO.FR), France's auto
makers' association said Monday.
Peugeot has in recent months asked U.S. development partner
General Motors Co. (GM) to inject more cash. The car maker has also
held talks with Chinese partner Dongfeng Motor about taking a
potential stake or extending an industrial alliance, according to
people familiar with the matter.
New registrations at Renault, which is continuing to benefit
from growth in demand for its entry-level range of Dacia no-frills
cars, fell only 3.6%, though for the year to date its registrations
are down 12%.
Most other manufacturers had a poor June in France, the euro
zone's second biggest car market after Germany. New registrations
fell 10% for Volkswagen AG (VOW.XE), Europe's biggest auto maker
ahead of Peugeot, 9.5% for Ford Motor Co. (F), and 31% for GM. Like
Peugeot, Ford and GM are making heavy losses at their European
operations. Some Asian manufacturers had a poor month too, with
Nissan Motor Co.'s registrations down 17% and the combined figure
for South Korean manufacturers Hyundai Motor Co. (005380.SE) and
Kia Motor Corp. (000270.SE) down 23%.
Bucking the trend was Italy's Fiat Spa (F.MI), with June
registrations up 7.8% including a 20% jump for its Fiat brand.
There were also gains for Toyota Motor Co. and Daimler AG (DAI.XE),
with Daimler benefiting from demand for its Mercedes Benz premium
cars.
Write to Inti Landauro at inti.landauro@dowjones.com, Matthew
Curtin at matthew.curtin@dowjones.com and Inti Landauro at
inti.landauro@dowjones.com