European car sales in 20-year slump

European new cars sales slumped in January to the lowest level for 20 years, trade data showed on Friday.

Sales fell by 27% in January from the figure in January last year, the European Automobile Manufacturers Association (ACEA) said.

New registrations totalled 958 517 cars, the lowest level for two decades, ACEA said.

“All markets [contributed] negatively to the results,” it said in a statement which underscores distress in the European industry, badly hit by the United States-born economic crisis which has left most of Europe in recession.

On Thursday, the European Union’s Eurostat data agency reported that factories and refineries in EU had cut production at the fastest rate on record last month, and for 2008 as a whole.

Industrial output in the 15 EU nations using the euro currency last year fell by 2,6% in December and 12% for 2008 as a whole, both the biggest slumps since records began in 1990.

The news was little better for the 27-nation EU as a whole.

Industrial production fell by a record 2,3% in December in the wider EU and by yet another record 11,5% for the whole of last year.

Earlier this week, European car makers urged EU nations to step up and coordinate action to help their industry through the economic crisis with car production set to slide further as the year progresses.

“The measures that the EU has agreed upon so far are insufficient to meet the needs of our industry,” said Carlos Ghosn, president of the European car industry’s ACEA trade association.

The ACEA said that car production fell by 20% in the last quarter of 2008, and it expects output to decline this year by at least 15%, putting pressure on costs and jobs.

Sales at Europe’s leading auto maker Volkswagen fell by 15% in January.

It has put around two-thirds of its German workforce on shorter hours as it slashes production to cope with the fall in demand.

Late last month Sergio Marchionne, chief executive at Italy’s Fiat, said he expects 2009 to be the company’s toughest year to date, while also warning that the country’s car sector could shed 60 000 jobs unless the state comes to the rescue.

National bailouts of their car sectors are high on Europe’s agenda, both from those eager to implement them and those warning against the threats of protectionism.

The European Commission warned France on Thursday that its plan to bailout struggling French car makers must not have “negative collateral effects” on other EU nations.

President Nicolas Sarkozy has announced plans to lend PSA Peugeot Citroen and Renault €3-billion each and other measures in exchange for a promise not to shut French plants or sack French workers.

The scheme has riled several EU nations, not least the Czech Republic, which currently holds the EU’s rotating presidency.

The Czech Republic is home to a number of foreign-owned car plants, including one by France’s PSA Citroen Peugeot, which announced plans on Wednesday to cut 11 000 jobs worldwide in 2009.

New car registrations in Europe have now dropped for nine straight months, mirroring the effects of the credit crunch.

In absolute numbers, January 2009 volumes reached 958 517 units, or the lowest level in two decades.

With the exception of France (-7,9%), all markets faced a double-digit downturn.

German sales were down by more than 14%, Britain’s remaining car industry registered more than 30% fewer cars, Italy was down 32% and Spain a whopping 41,6%.—AFP

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