If economists need any evidence that the European Union has emerged from the recession, cars sales improvement seems a fair measure. Other than houses, cars are generally the most expensive things most consumers own. EU car sales surged 14.6% in June, outpacing the U.S. growth rates for the same period. Among the companies that posted less than strong results was General Motors Co. (NYSE: GM).
The European Automobile Manufacturers’ Association (ACEA) reported on the magnitude of the increase:
In June 2015, demand for new passenger cars in the EU was up (+14.6%), pursuing the upward trend commenced 22 months ago and marking the largest over‐the‐month increase since December 2009. All major markets significantly supported the overall expansion, with Spain (+23.5%), France (+15.0%), Italy (+14.4%), Germany (+12.9%) and the UK (+12.9%) posting double‐digit growth. Across the region, new passenger car registrations totalled 1,364,009 units.
Volkswagen, by far the largest car company in the EU, with its market share of 24.3% in June, showed an increase of 16.8% to 331,244. Next in market share at 10.9%, the parent of Peugeot, PSA Group, had sales of 148,932, up 12.8%. Renault Group had sales of 148,205, up 4.5%, followed by Ford Motor Co. (NYSE: F), which posted an improvement of 14.6% to 101,431.
GM’s multiyear sales troubles in the EU are well documented. The largest U.S. car company has posted losses in the region each year for more than a decade. The lack of progress is particularly curious because GM’s sales in the world’s largest car market — China — have made it one of the leaders in sales there. And GM is by far the largest car company in America.
GM’s primary unit in the EU is Opel/Vauxhall. Among the company’s primary problems is that none of its U.S. models have sold well in the EU. That leaves GM as one of the few companies that has not successfully migrated models from its home market to Europe. Holding market share with cars that are mostly unique to the region is particularly expensive. Its EU brands, led by the Astra and Insignia lines, have not caught on sufficiently to help GM get a better hold on the consumers.
GM’s failure in Europe will continue to drag on its goal to be the number one car company in the world, a title for which it battles against VW and Toyota Motor Corp. (NYSE: TM). Even if GM eventually makes money in Europe, it will be a shadow of its ambitions.