New car sales in Europe declined by 7.9% in June according to data released by the European carmakers’ association, ACEA.
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ACEA’s data confirmed figures released earlier this month by JD Power.
ACEA said that ‘rising inflation and soaring fuel prices’ were among the main factors influencing new registrations’.
June’s weak car sales figures will compound the mounting gloom about prospects for Europe’s economy and its vehicle markets.
ACEA also said that car sales in Europe were 2.2% below the same period of last year.
Among the worst performing national markets in June were the UK (-6.1%), Italy (-19.5%) and Spain (-30.8%).
Spain’s unexpectedly large monthly decline reflects some uncertainty over a scrapping incentive that the government is planning to introduce in the face of sharply contracting demand. Analysts say that may encourage people to put off purchase until the scheme has been introduced.
JD Power forecasts that the West European car market will decline by 4% to 14.21m units in 2008. The market is forecast to contract further to 14.02m units in 2009.
JD Power adds that a further risk to volumes may be emerging in the form of rising vehicle prices, though it is unclear at this time whether OEMs will be at liberty to pass on rising costs of raw materials.
The forecaster maintains that the West European market is slowing as a result of the ‘toxic mixture’ of falling asset prices, slowing global and European economic growth, financial crisis and rising inflation.
See also: UK: Car sales in Western Europe down 8.8% in June
