Car production in Poland fell by a third year on year in December 2012 following big factory lay-offs at Fiat.

Fiat Auto Poland has started laying off workers as part of a plan to cut its workforce by a third. Industry monitor Samar said the number of passenger cars and trucks produced in Poland fell 21% from November and by 23% for all of 2012.

Most of the cars assembled in Poland are exported and sales have been hit by the downturn in European sales which were off 7.2% in January-November 2012.

Analysts believe that Poland, the only European Union member since 2008 to avoid a contraction in its economy, could plunge into recession in the first half of 2013. According to economists’ estimates, car production accounts for around 7% of Poland’s industrial production.