Business

Car shares hit in latest market sell-off

Shares in European carmakers have been hit in a renewed stock market sell-off.

Peugeot suffered most, almost 5% lower in Thursday afternoon trading, while Renault was 2.1% down and Daimler 1.6%.

It comes after new data showed car sales had continued to drop in France and Spain in May, following the expiry of government subsidies for sales, while US car sales also lagged.

Markets remain concerned about the strength of the global recovery after weak manufacturing data from the US.

European markets were down about 1% after Asian shares ended the day lower, with Japan's benchmark Nikkei 225 index down 1.7%.

On Wednesday, a survey indicated that growth in US manufacturing in May slowed to its lowest rate since 2009, while separate data showed that private employers in the US hired fewer workers in May than had been expected.

Tough times

Meanwhile, US car sales in May were at their lowest seasonally adjusted rate in eight months, and well below expectations - though some of the shortfall may be due to supply problems related to the Japanese earthquake.

The poor data sent shares in General Motors and Ford about 5% lower on Wednesday.

On the other side of the Atlantic, car sales in France were down 8.3% in May from a year earlier on a seasonally adjusted basis, following a drop registered in April.

A French sales incentives scheme ended in December, although sales that benefited from the subsidy continued to be registered until March.

In Spain, sales data registered a 23% drop versus a year earlier - the 11th drop in a row. However, sales in Italy registered a rebound.

Japan's car sector also reported bad news, as data showed that sales of Japanese cars in the US dipped in May.

Sales at the world's biggest carmaker Toyota were down by 33%. Honda Motors reported a 23% dip in sales, while Nissan Motors witnessed a 9% drop.

It is unclear how much of the sales fall was due to disruption to the carmakers' supply chains caused by the 11 March earthquake and tsunami.

However, shares in car manufacturers fell on the Tokyo Stock Exchange, with Toyota down 3.3%, Honda 2.4% lower and Nissan down 3.2% at the close of trade.