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GELYY News DJ FOCUS: French, German Auto Makers End 2010 In High Gear.

Tuesday, January 11, 2011 12:30 AM

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News for 'GELYY' - (=DJ FOCUS: French, German Auto Makers End 2010 In High Gear)

(This story was originally published Monday)


By David Pearson

Of DOW JONES NEWSWIRES

http://www.djnewsplus.com/article/DN-CO-20110110-010580.html?mod=J1&a=T+Wire&h=FOCUS%3A+French%2C+German+Auto+Makers+End+2010+In+High+Gear+

PARIS (Dow Jones)--Volume car makers in France and Germany ended 2010 in high gear as sales in Europe held up much better than expected due in part to government incentives, continuing strong demand from outside the region and the weak comparative data for 2009.

Renault SA (RNO.FR), Volkswagen AG (VOW.XE) and PSA Peugeot-Citroen (UG.FR) have turned in sparkling 2010 sales data that put to shame the pessimistic forecasts made a year ago as they were licking their wounds after the market collapse of 2009.

Renault and Volkswagen reported their global sales of cars and light-goods vehicles surged 14% last year compared with 2009, and both said their 2010 sales were at record levels.

Renault reported sales of 2.6 million vehicles last year, boosted by a 26% surge outside its core markets in Europe that traditionally provide the bulk of its sales and profits. Last year's total topped a previous record for the company set in 2005.

Martin Winterkorn, chief executive of Volkswagen, Europe's largest car maker by volume, said over the weekend in Detroit his group sold 7.14 million cars and trucks in 2010, fuelled by strong growth in China and Brazil.

Last week, Peugeot-Citroen Chief Executive Philippe Varin said his group sold 3.6 million vehicles in 2010, an increase of 13% from the 3.19 million of 2011.

The big European car makers are relatively sanguine about market prospects for the current year. Renault expects global automobile sales growth to moderate after last year's 12% surge, but still is projecting that the total market will increase by more than 4% compared to 2010. Winterkorn didn't give a specific sales outlook for 2011, apart from describing it as a "key year" for his company.

Auto industry analysts expect the European market will get off to a slow start, but will pick up later in the year. Nomura International is projecting 5% growth in Germany, European single-biggest market, and predicts the French market is likely to shrink 8% year-on-year.

Sales in France were surprisingly robust in December as buyers rushed to order vehicles prior to the end of a scrapping initiative at the end of the year that has bolstered sales over the past two years. Renault's order intake in France was 30% above that of the same month of 2009, and this will show up in deliveries in the first quarter of 2011, Renault's head of sales and marketing Jerome Stoll told reporters. He said this effect will allow European sales in the first quarter to be relatively flat, but sales should drift lower after that. For all of 2011, Renault expects European sales to be flat at best and down 2% at worst.

With sales sluggish at best in their core European markets, car makers are on a drive to tap into faster-growing regions such as Latin America, China and India.

Volkswagen still harbors an ambition to knock Toyota Motor Corp. (7203.TO) off its perch as the world's leading car maker by volume by 2018, and is aiming to triple its sales in the U.S., while ramping up its presence in China, Russia and Brazil.

Renault doesn't have a presence in the U.S. and sells only a small number of cars in China. However, it, too, is targeting continued robust growth in Brazil and Russia, where its sales surged by one-third last year. Renault expects non-European markets will account for 43% of its sales this year, up from 37% in 2010.

Premium-car makers also were riding the wave of strong demand in 2010 compared to 2009 when private and corporate buyers held back spending to save cash.

Germany's BMW AG (BMW.XE) reported a 14% rise in sales last year to 1.46 million cars and said it expects to top 1.5 million vehicles in 2011. Sweden's Volvo Car Corp., now a unit of China's Zhejiang Geely Holding Group following its sales by Ford Motor Co. (F), said its sales rose 11% last year, while Volkswagen's Audi brand sold 1.09 million cars, up 15% from 2009.

Daimler AG (DAI.XE) Chief Executive Dieter Zetsche told reporters Sunday that vehicles sales in 2010 were up 15% year-on-year and predicted global demand for new cars in 2011 will rise by roughly about 6%.

Auto analysts point out that last year's impressive sales growth figures won't necessarily be reflected in the 2010 earnings data that will be released next month. Car makers in Europe have been offering buyers massive discounts in a bid to preserve market shares. With the market expected to remain sluggish at best this year, margins are likely to remain under pressure.


-By David Pearson, Dow Jones Newswires; [phone]; [e-mail]


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(END) Dow Jones Newswires

January 11, 2011 00:30 ET (05:30 GMT)

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