Europe's sales slump slowly eases with 24% drop in June

Europe's car industry extended a tentative recovery for a second straight month, leaving automakers and dealers hoping that state subsidies will help spur a stronger rebound.

Registrations fell 24 percent in June to 1.13 million vehicles in the European Union, Britain and the European Free Trade Association (EFTA) countries, industry association ACEA said on Thursday. That is an improvement on May's 57 percent slump and April's 78 percent drop.

Porsche and Volvo were the only brands that saw their registrations rise in June. Porsche sales rose 7.5 percent while Volvo gained 0.2 percent.

Volkswagen Group registrations dropped by 26 percent with Seat sales down 35 percent, VW brand down 29 percent, Audi down 27 percent and Skoda down 13 percent.

Renault Group sales fell 16 percent, with Renault down 15 percent and Dacia registrations down 18 percent.

PSA Group sales dropped by 30 percent, with Opel down 48 percent, Citroen down 23 percent and Peugeot down 17 percent.

Luxury automakers also posted a drop in June, with BMW Group's sales falling 26 percent. Both the BMW and Mini brands were down 26 percent.

Rival Daimler's registrations dropped19 percent as Mercedes-Benz fell 12 percent and Smart sales plunged 83 percent.

Among Asian brands, Hyundai and Kia both fell 27 percent, Nissan was down 30 percent and Toyota dropped 14 percent.

• Download PDF here for European registrations by brand in June.

Fiat brand sales dropped 26 percent, while Alfa Romeo registrations fell 38 percent.

Ford was down 25 percent, Land Rover 35 percent and Jaguar 58 percent.

Sales fell in all European markets except France where they rose 1.2 percent in June thanks to government incentives for low-emissions vehicles that were introduced at the beginning of the month.

Registrations in Germany tumbled 32 percent and slumped in Spain, Italy and Portugal with drops of 37 percent, 23 percent and 56 percent respectively.

Through June, overall European sales fell 40 percent to 8.43 million, ACEA said.

With sales still well below last year's levels, hopes are fading for the more V-shaped recovery seen in China.

VW on Tuesday sought to temper optimism, telling workers in a staff newspaper that it's put a freeze on new hiring despite a pick-up in orders.

Automakers have been cutting costs and jobs to defend profit margins. Daimler needs to cut more than 15,000 posts, its head of human resources told German news agency DPA last week.

So far, governments' attempts to entice consumers have not sparked a major rush to showrooms. They are seeking to steer would-be buyers in the direction of electric vehicles and hybrids. Lease prices for some battery-powered cars have plummeted.

Globally, car sales are recovering as economies exit strict lockdowns. The China Association of Automobile Manufacturers said last week that the outlook for this year is improving, predicting a drop of 10 percent to 20 percent for the year. In Europe, car sales are expected to fall 20 percent, according to a forecast by Bloomberg Intelligence.

Reuters and Bloomberg contributed to this report