Car sales in Western Europe fell by 18.3% in October continuing the decline that has followed the ending of government sponsored scrappage incentives across the region.

The latest month’s result continues to show the difficulties faced by the car industry in the region. The comparison is with a period in 2009 where government scrappage incentives heavily boosted the market, and further negative year-on-year results are expected for the final months of 2010, according to JD Power Automotive Forecasting.

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The analysts at JD Power say that with nearly all scrappage schemes now at an end, the underlying weakness of the market is being revealed. JD Power estimates that the annualised selling rate stood at just 12.2m units in October (for comparison with pre-crisis levels, the West European car market was 14.8m units in 2007).

The German market continues to be a major contributor to the poor year-on-year comparison in the region. Nowhere did scrappage incentives boost the market more in 2009 than in Germany. The market for 2009 outturned at 3.8m units as a result but this year it will do little better than 2.9m units according to JD Power.

However, on a more positive note, the German selling rate has being creeping up over the last few months, a reflection of improving consumer confidence.

In October, car sales in Germany were down 20% on last year and the year-to-date market was down by 26.8%.

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Car registrations in France were down 19% from a year ago and car sales in Spain remain very weak with the selling rate for the latest month just 820,000 units a year — the market stood at 1.6m units pre-crisis. The Italian and UK markets are also struggling (down 29% and 22% respectively).

JD Power forecasts that the West European car market will show a decline of 6.2% to 12.8m units in 2010, followed by a further decline of 2.1% to 12.56m units in 2011.

While the underlying economic drivers of car demand are expected to continue to pick up next year, the lower 2011 market versus 2010 is ‘due to the 2011 full year market being compared to a 2010 market that still had incentive inflation in the first half’.

See also: GERMANY: VDA positive despite another monthly sales fall