European Auto Industry Will See Slight Rebound in 2014

December marked the first signs that auto sales in France, Italy and Spain may be starting to rebound. French sales rose 9%; Spain rose 18%, and Italy rose 1%. While sales in Northern Europe had already begun to rebound, Southern Europe had lagged behind.

Industry analysts predict that it will be years before sales return to pre-crisis levels, but sales may grow slightly in 2014, after the worst sales in decades in 2013. Since their 2007 peaks, Spanish sales have fallen 54%, and Italy has fallen 48%.

European-focused automakers like PSA PeugeotPeugeotFrance, 1882 > present120 models
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-CitroënCitroënFrance, 1919 > present94 models
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and FiatFiatItaly, 1899 > present159 models
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will get the biggest boosts from the slow growth. However, many automakers will not actually make a profit on the sales because of deep discounts to get buyers into showrooms.

Auto factories are still plagued by over capacity with the ability to build far more cars than they could ever sell.

"With the overcapacity and a market volume that will not recover very fast, the situation will remain really tough price wise," Peugeot CEO Maxime Picat

Despite the general market downturn, premium marques have continued to post sales gains or only marginal drops. Analysts do not see this changing in 2014. BMWBMWGermany, 1918 > present87 models
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, MercedesMercedes-BenzGermany, 1924 > present197 models
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and AudiAudiGermany, 1909 > present83 models
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all have smaller, cheaper models planned for Europe in the coming year.

Source: Automotive News Europe (1,2)