New car sales in January were down on the same period last year. On top of this, traditional European manufacturers find themselves losing share to their Japanese and Korean counterparts. Future growth for European manufacturers may be found in the emerging eastern European car market.

In January new car sales fell 1.6% in western Europe compared to the previous year, with just over one million new cars sold. These lower figures demonstrate the decline in Europe’s major markets such as Germany and France, where sales were down 12.4% and 11.9% respectively. Italy was the biggest market in terms of units sold, with a 5.6% increase. In the UK and Spain, registrations were up by 5.8% and 9.2% respectively, compared to the same period last year.

However, overall European new car registration figures improve when the new car registrations of the new European Union candidates are added. Sales from these countries increased by 3.5%, reaching 61,625 units sold. The most significant increases were in Poland, Hungary and the Czech Republic. The relatively poor performance of the traditional European markets has led several leading car manufacturers to focus on the emerging eastern European market.

Following their European assault, Japanese and Korean brands were the top performers for the month of January. The Japanese brands’ share of the European market for has increased to 14.1%, while Korean manufacturers increased their European market share to 3.7%. The biggest increases on last year were shown by Toyota with 29.2%, Mazda with 24.8% and finally Suzuki with 17.9%.

Most European car manufacturers lost market share in January. Europe’s leading manufacturer Volkswagen was badly hit, with sales down 10% and a declining market share. Interestingly, the entry of Jaguar to the diesel niche has brought a 43.2% increase in Jaguar sales compared to 12 months ago.

Car sales are a reflection of consumer confidence. A small recovery in the European economy toward the second half of 2004 is expected to help boost sales. However, it seems that it is the increasingly popular Asian manufacturers that stand to gain most in the continent’s developed markets. European manufacturers must now look to Eastern Europe in order to increase sales and market share.

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