European car sales suffer worst June total since 1996

Hundreds of cars in a car park European carmakers have been cutting prices and manufacturing capacity

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New car sales in Europe suffered their worst June since 1996 with demand falling to 1.134 million vehicles, down 5.6% from the same month last year.

It brought sales for the first half of the year to 6.205 million cars, a 6.6% fall, the carmakers' body ACEA said.

The UK was the only major car market to expand, with sales up 13.4% in June and 10% for the six months.

European car sales have seen an almost uninterrupted fall for two years, due mainly to recession in the eurozone.

They saw a small rise in April, but that was followed by a big fall in May.

The figures relate to the 27 countries in the European Union plus those in the European Free Trade Association.

Between January and June, sales in Germany fell 8.1% from a year earlier and in France they were down 11.2%. Spanish sales fell 4.9%, while Italy suffered a 10.3% decline.

Unemployment and austerity measures have curbed consumer spending. With car sales falling to a 17-year low in 2012, European carmakers cut both prices and manufacturing capacity but they have largely failed to arrest the decline.

France's Peugeot, which is cutting 8,000 jobs and closing a factory in the country, was one of the biggest sales casualties last month among the main carmakers. Its sales fell 9.3% in June.

Winners in June included Seat, with sales up 12.2%, and Renault-owned Dacia, up 17%.

Among luxury carmakers, Mercedes sales bucked the market decline again with a 2% monthly gain. BMW fell 7.7%, and VW's Audi dropped 8.9%.

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