Fiat One More Time

Well I'm sure Paris would never forgive me if I neglected to mention the fact that Fiat had another very good month in October. This is not 'sour grapes' or anything but I do think it is important to take note of the fact that this is partly being driven by substantial discount price offers, and also of the fact that it is the services sector which is the key to the modern developed economy since this now accounts for about 70% of total GDP.

On other fronts I would like to stress that I think the French poor third quarter performance is something of a statistical blip, and that fourth quarter results should be much better in France. This unfortunately cannot be said for Italy or Germany, and I am convinced that in the coming quarters we will see the important underlying weakness in these economies once more revealed.

On some of the theoretical reasons why this should be so, I have this rather provocative post on Demography Matters yesterday which some may find an interesting read.

Toyota Motor Corp., Fiat SpA and PSA Peugeot Citroen last month led the first gain in European car sales since May as they offered discounts to customers and attracted buyers to models released over the past year.

Sales rose 3.6 percent from a year earlier to 1.21 million vehicles, the Brussels-based European Automobile Manufacturers Association said in a statement today. Registrations for the first 10 months of the year advanced 0.4 percent to 13.1 million units.

``The gains show the strongest performers are those with the most recent model range supported by aggressive pricing and marketing efforts,'' said Thomas Ryard, an Amsterdam-based automotive analyst at Global Insight, a consulting company.

Toyota and Fiat discounted cars and found buyers for models such as the Japanese automaker's Yaris subcompact and RAV4 sport- utility vehicles and Turin, Italy-based Fiat's Grande Punto subcompact. Peugeot rose on rebates and on demand for cars such as the small 207 hatchback, which reached dealers in May.

Fiat's European market share through October jumped to 7.5 percent from 6.4 percent a year earlier. Its October sales rose 16 percent to 92,704 cars. In addition to the Grande Punto, the Alfa Romeo 159 sedan, introduced at the end of 2005, contributed to the gains. Fiat will release the Bravo compact model early next year.