Figures released by ACEA show that the EU car market was down for the sixth consecutive month in March, with a decline of 7% compared to March last year.

ACEA noted that March new car registrations have not been at this level since 1998. Over the first quarter, the EU car market shrank by 7.7%, compared to the same period a year ago, with a total of 3,312,657 new registrations.

As revealed earlier this month by LMC, the car markets of Italy (-26.7%) and France (-23.2%) were big fallers whereas the UK (+1.8%) and Germany (+3.4%) performed better than they did in the same month a year earlier.

From January to March, contrasting performance across countries led to an overall 7.7% drop. Looking at the major markets, the German (+1.3%) and British (+0.9%) slightly expanded, while the Spanish dropped by 1.9%, and Italy (-21.0%) and France (-21.6%) faced a much sharper downturn.

Peter Fuss, EMEIA Partner, Ernst & Young Global Automotive Centre, said that the drop was  primarily to weak consumer confidence across the continent.

“While the industry expects the first quarter of this year to register the worst sales, with succeeding quarters proving less damaging, overall we expect European sales in 2012 to dip below the 2009 low point – registering an overall decline of around 5%.”

Analysts note that the big decline in France in Q1 is due to scrappage incentives distorting the sales figure during the same period last year. And the alarming 21% drop in Italy is partly attributable to the strike by car transporters, but is also a reflection of the ongoing economic weakness in the country that could push down sales in future months.

Fuss sees manufacturers continuing adopting aggressive pricing strategies. “Overall, there is a need for vehicle manufacturers to keep inventories and production in check to avoid funding issues similar to the 2008/09 recession,” he says.

See also: UK: Western Europe car sales down 7.1% in March

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