Credit Crunch Hits European New Car Sales

18 April 2008

BRUSSELS: European new car registrations plunged by nearly ten per cent in March, reports the European Automobile Manufacturers' Association – a worrisome omen both for the auto industry and consumer confidence trends.

Analysts interpret the fall as signal that a growing number of  European consumers are deferring high-ticket purchases as the credit crunch begins to bite where it hurts most.

Most of the auto giants – Fiat, Ford, General Motors, Peugeot, Toyota and Volkswagen – report a decrease in sales during the first quarter.

Asian brands were the worst hit, with Toyota sales plunging 17% year on year and Hyundai by 15%.

The auto organization attributes the western European sales slide  to "a context of economic uncertainty generated by the US financial crisis".

It also claims that the March results were negatively affected by this year's early Easter holiday dates, which resulted in two fewer sales data processing days than in 2007.

Says J D Power and Associates Automotive Forecasting senior director Pete Kelly: "The market is definitely softening." Adding, however, that there is  "a seasonal element to the numbers".

As ever in hard times, the moneyed end of the market is unaffected, with luxury automakers BMW and Daimler notching higher quarterly sales, respectively of 11% and 4.5%.

But the latter, which also manufactures low-end city car marque Smart, reported a 1.8% fall in March registrations.

Data sourced from Financial Times; additional content by WARC staff