European Car Sales Hit 20-Year Low; Don't Worry, Things Have Stabilized

By: Mike Shedlock | Wed, Jun 19, 2013
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NPR reports European Car Sales Hit 20-Year Low For May.

Country by Country Details

First Quarter GDP

Italy VAT Hike

"The head of Italy's association of foreign carmakers, Romano Valente, urged the government to resist raising the value-added tax on car sales. The tax is scheduled to increase to 22 percent from 21 percent in July. Officials have said it will raise 4 billion euros ($5.33 billion), but conservative lawmakers in the cross-party coalition are opposed, claiming it will hit sales of big-ticket items harder."

For Italy economic comments, please see Dumb and Dumber Tax Hikes in Italy; Grand Coalition Splintering; Another Italy Convulsion Coming Up

Signs of Stabilization?

My favorite comment comes from IHS Automotive analyst Carlos da Silva who sees the situation in Europe as stabilizing: "The situation remains tense. Yet, for the second month in a row the rate of decline is slowing down. This means that sales are stabilizing trend-wise."

Stabilizing? Really? With German sales plunging? And a VAT hike in Italy? With Spain in a Depression? With France imploding under Hollande?

I suggest the slide in Germany and France is going to catch nearly every economist off guard with its intensity. A VAT hike in Italy will be icing on the depression cake.

At least one can make a claim about pent-up demand in Europe. One cannot say the same thing in the US.



Mike Shedlock

Author: Mike Shedlock

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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit to learn more about wealth management for investors seeking strong performance with low volatility.

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