PARIS — European car sales tumbled again in May, reaching their lowest level in 20 years, manufacturers’ data showed Tuesday, but analysts and industry officials said the market might have finally begun to bottom out.
Sales fell 5.9 percent in May from a year earlier, to 1,042,742 units, the European Automobile Manufacturers’ Association reported from Brussels. The association said it was the smallest number of vehicles sold in the month since May 1993, when the number stood below one million.
The European auto market peaked in 2007 at nearly 16 million new passenger vehicles, but it has been in retreat ever since. In the five months through May, new car sales were declining at a 6.8 percent annual pace, somewhat worse than most forecasts at the start of the year.
More than five years after the financial crisis arrived, Europe is still struggling to restart economic growth and households remain extremely reticent about big purchases like automobiles. The unemployment rate of the 17-nation euro zone stood at a record high of 12.2 percent in April, and nearly 27 million men and women across the wider European Union were unable to find jobs. Among young people, a top demographic for the future of the industry, the jobless problem is even worse, further damping prospects.
Carlos Da Silva, an analyst at IHS Global Insight, said that despite the dreary news, the rate of decline in the market appeared to have begun slowing since the start of the second quarter. While that is not the same thing as an end to the decline, he noted, it suggests that the second half will not be as bad as the beginning of the year.
Mr. Da Silva forecast that sales of new cars in Europe would shrink about 4 percent this year from 2012, when 12,053,904 vehicles were sold, the lowest level since 1995. Globally, car sales will rise about 3 percent this year, Mr. Da Silva said. The North American market will gain about 6 percent, and China as much as 10 percent to 11 percent. The only major market expected to fare worse than Europe, he said, was Japan, which should shrink 7 percent.
By early 2014, he said, European car sales should begin rising in the single digits.
“But ‘recovery’ is a big word,” he said, as most of the demand now is to replace older, worn-out vehicles, and it is likely that growth in Western Europe will be “muted” for years to come.
Wolfgang Eder, chief executive of the Austrian steel maker Voestalpine, said Tuesday that his own observations confirmed that the European market had hit bottom in recent months, but that he did not expect a strong recovery soon.
“We don’t expect sales will go down anymore,” Mr. Eder told a small group of journalists in Frankfurt. “But, based on what we hear from customers, we don’t expect a big increase, either.”
“The important thing is that the decline has stopped,” Mr. Eder said. Based in Linz, Austria, Voestalpine is a major supplier of auto-body parts and other components to automakers.
Mr. Eder predicted that production of mass-market cars would migrate increasingly to Eastern Europe and other regions with lower labor costs, with only the production of luxury cars remaining in Western Europe.
The industry figures Tuesday cover new passenger car registrations in the 27-nation European Union, with the exception of tiny Malta, for which the latest figures were not available. The data showed a pattern across the major markets that has been largely consistent this year; only Britain expanded in May, from a year earlier, while Spain, Italy, Germany and France all lost ground.
European sales at Volkswagen Group, the largest European automaker, which includes the Audi, VW, Seat and Skoda brands, fell 2.6 percent over all in May from a year earlier. Sales at PSA Peugeot Citroën, the second-largest carmaker, fell 13.4 percent. Renault’s sales fell 9.5 percent, while Fiat’s sales fell 10.8 percent.
General Motors’ European sales slid 11.6 percent, led by a 22.4 percent decline in the Chevrolet brand. Ford Motor’s sales were little changed, down 0.6 percent.
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