Europe’s Car Slump Continued in March, but Euro Rises as Inflation Roars Again
2022.04.20 13:20
By Geoffrey Smith
Investing.com — The woes of Europe’s automotive industry continued in March, as registrations of new passenger vehicles fell 20% from a year earlier to 844,187.
“The ongoing supply chain disruptions, further exacerbated by Russia’s invasion of Ukraine, negatively affected car production,” the industry lobby group ACEA said in its regular monthly release.
All four of the big EU markets saw declines, ranging from 24.4% in Italy to a relatively modest 4.6% in Germany. In France, registrations fell 17% and in Spain they fell 12%. Outside the EU, U.K. car registrations were down by 14% from a year earlier.
Among individual companies, Stellantis – the owner of FIAT, Peugeot (OTC:PUGOY) and Opel – fared worst with a 33% drop, while BMW) group registrations fell 20% and Volkswagen (ETR:VOWG_p) group registrations fell 24%.
The numbers are a snapshot of the problems facing European industry more broadly as a result of continued supply chain disruptions and surging energy costs. Producer price inflation continues to rage unchecked: German statistics office Destatis said that producer prices in Germany rose 4.9% in the month of March alone, and were up by 30.9% on the year. Energy prices were up an eye-watering 83.8% from a year earlier, while natural gas prices were up 144%.
The news helped the euro rise 0.7% against the dollar to $1.0861 by 5:50 AM ET (0950 GMT). The move was also driven by comments from ECB governing council member Martins Kazaks, the Governor of the Latvian National Bank, saying that the ECB could raise its official interest rates as early as July. ECB President Christine Lagarde had downplayed the chances of that at her press conference last week, stressing instead the risks to economic growth from the war in Ukraine.
Separate data published on Wednesday by Eurostat showed Eurozone industrial production rose 0.7% in February – more than the 0.2% expected and a rebound from a 0.7% decline in January – but those data largely predate Russia’s invasion of Ukraine, which has changed the economic outlook radically. The International Monetary Fund cut its forecast for Eurozone growth this year to a mere 2.8% on Tuesday, from an earlier estimate of 3.9%.
