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Europe Car sales Plunged to 15-year Low in 2008
Feb 06, 2009

New car registrations in Europe broke the 15-year record and slumped to lowest level in 2008 due to weak consumer confidence and credit crisis.

The European Automobile Manufacturers Association (ACEA) said 14.7 Million new cars were registered (sales) in Europe during 2008, 7.8% down from 2007 and the lowest in last 15 years, as reported by THE WALL STREET JOURNAL.

The total number of new cars registered in December 2008 stood at 924,646 Units, 18% down from the same month a year ago. US General Motors Corp. recorded the highest fall among major auto players in Europe during 2008, with a drop of 14% to 1.41 Million Units. Japan’s auto giant Toyota Motor Corp. also saw decline of 12% in new car registrations to 814,581 Units. Europe’s largest auto maker, Volkswagen AG, posted a fall of 4.4% to 3.03 Million Units. On country level, sales dropped 62% in Ireland and 50% in Spain. Sales in the UK, France, Italy and Germany plunged 21%, 16%, 13% and 7% respectively.

The downfall in new passenger car registrations to a 15-year low was primarily triggered by weak consumer sentiments amidst global financial crisis. European car market represents an important source of earning for several global auto giants, but the market was severely hit in 2008 on account of low liquidity in credit industry. Consequently, consumers found it hard to arrange funding for their new vehicles and postponed their big-ticket purchases.

Furthermore, drop in European car sales pointed to the difficulties faced by the boarder economy. In countries where house prices tumbled drastically, car sales were even worse.

European car manufacturers are facing a tough challenge to carry on their operation in long and tough winter season because sales continue to move downward, thanks to the global economic crisis. Apart from this, auto manufacturers across the continent have experienced low sales in recent months as the demand is eroding in major markets.

According to a Research Analyst at RNCOS, “Car sales in Europe slumped dramatically during 2008 as the credit market was suffering from liquidity crunch. Auto manufacturers will see another spell of low performance till the first half of 2009. Moreover, the time frame for recovery is still uncertain, translating into gloomy future for auto manufacturers.”

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