The automobile industries in Spain and France witnessed decline in October 2008 due to falling demand for vehicles, rising unemployment and liquidity crisis in credit market.
According to the national carmakers’ associations, the sales of new cars in Spain and France slumped 40% and 7.3% respectively during October 2008 against the same month previous year, as reported by BBC.
A decline of 40% in the Spanish automobile industry was the third biggest monthly year-on-year percentage fall. It took the volume sales to 77,660 Units in October 2008 from 129,384 Units in the same month a year ago, said ANFAC, the Spanish automobile manufacturers’ association. The automobile sales in the first ten months of 2008 (January-October 2008) plunged 23.8% to 1.03 Million Units over the same period last year. Moreover, the sales of light passenger and utility vehicles in France tumbled to 216,139 (6.2%) Units in October 2008.
The economic slowdown (the main reason) took toll on the demand for vehicles in both the countries. Consumers have become cautious about their expenditure in the wake of prolonged economic slowdown. Moreover, the rising unemployment has forced people to cut down their spending on automobiles.
Besides, liquidity crunch in the credit market is another factor contributing to the low sales of automobiles. The financial crisis has engulfed whole Europe, making credit access extremely difficult for people planning to buy vehicles. In addition, declining consumer disposable income in both the countries have added to the already grim situation.
Industry experts have predicted that the automobile industries of both the countries - France and Spain - will see tough time next year. In view of prospective slowdown in automobile demand, many auto manufacturers have postponed the launch of new cars and reduced costs in operations to offset the losses incurred because of weak demand.
According to a Research Analyst at RNCOS, “The current economic conditions are not favorable for business, resulting in a decline in car sales in both France and Spain. Auto manufacturers and other associated business owners like automotive components manufacturers are badly hit by the slump in demand for vehicles.”
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