FRANKFURT -- Germany's new car registrations fell three percent in July after adjustments for fewer shopping days, industry association VDA said on Thursday, underscoring the persistent weakness in Europe's biggest car market.
Registrations dropped to 267,000 vehicles, for a decline of seven percent without taking into account the smaller number of shopping days, according to VDA initial estimates.
In the first seven months of this year, registrations dipped two percent to 1.9 million despite the launch of new models and buyer incentives, the group said.
"This clearly reflects the high oil price and weak consumption due to the continuing uncertainty on the part of buyers," VDA said.
VDA last month reduced its forecast for full-year new car registrations to 3.24 million units, little changed from the year before, from a previous estimate of three percent growth.
Exports in July also fell seven percent to 298,200 cars, while passenger car production fell 10 percent to 400,400 units.
"It shows VDA was correct to lower its guidance to a stable market," said M.M. Warburg analyst Marc-Rene Tonn, adding that July and August were traditionally weaker months.
While the figures would undoubtedly have been worse without incentives, Tonn believed the main factor behind the persistent difficulties in Germany remained consumers' widespread fear of unemployment.
German joblessness in July was the worst for that month since the country unified in 1990, and economists do not expect a sustained pickup in employment until next year at the earliest.
NO REASON FOR OPTIMISM
Europe's other major markets, however, fared little better.
Italian new car sales dropped 5.7 percent last month, while France reported a drop of more than 10 percent.
In Britain as well, new car registrations fell 4.6 percent in July from a year earlier, the Society of Motor Manufacturers and Traders said on Thursday.
German carmakers such as BMW that are grappling with the malaise have cautioned they see little cause for optimism.
"Purchasing restraint among consumers continues, and -- I regret to say -- there are currently no signs of a trend reversal in the coming months for the German market," BMW Chief Executive Helmut Panke told analysts on Wednesday.
The United States overtook Germany last year as BMW's single largest market for the first time amid the slump in the Munich-based carmaker's domestic auto market.
Volkswagen's luxury unit Audi on Tuesday posted record car sales -- but no thanks to Germany, where deliveries declined by 5.7 percent.
The BMW rival from Ingolstadt said that it, too, expected no material improvement in the domestic market anytime soon.
BMW gained 0.1 percent, but the stock was helped by a rebound following Wednesday's 3.9 percent drop, after the company reiterated uninspiring full-year earnings guidance.