Car sales in Europe in September 2008 recorded the biggest decline since September 1998 due to the ongoing financial crunch and soaring fuel prices.
According to ACEA the manufacturers association, registration of new vehicles in Europe declined 8.2% on YOY basis in September 2008, as reported by FT.
The total number of registrations for the European Union, excluding Malta, Cyprus, Iceland, Norway, Switzerland and Liechtenstein, were 1,304,583 Units, which is the lowest figure recorded for September since 1998. The period from January to September 2008 saw a fall of 4.4% in sales of the region.
Further, in the markets of Western Europe, new registrations declined 9.3% as compared to September 2007. The UK market recorded the sharpest decline of 21.2% in sales, followed by Spain and Italy that registered fall of 32.2% and 5.5% respectively.
The primary reason for this unprecedented decline in the sales of cars in Europe is the turmoil in the financial market. The financial crunch has adversely affected the European car industry as it reduced the overall demand for vehicles. Also, the crisis has made it more difficult to get credit, thus affecting the ability of auto industry to finance its daily operations.
Further, soaring fuel prices are also playing a key role in keeping the buyers out of the automobile showrooms. The worsening economic conditions of Europe have contributed towards the decline in demand for new cars. Thus, weak economy is the major reason that has restricted the purchasing decisions of consumers.
The sharply falling car sales are indicating that consumers are reducing their expenses. In the absence of easy credit availability, the future of car market could be in danger. The remaining period of 2008 is also expected to see a decline in the number of new car registrations.
According to the research analyst at RNCOS, “The European car industry is severely affected by the financial crisis that is taking the entire world in its grip. The demand for new cars is declining as either the consumers are feeling hesitant to make such big purchases or they are unable to locate the money lenders. The financial crunch would probably restrict the rise of European automobile market in coming times too.”
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