Figures released by JD Power show that the West European car market slipped marginally by 0.1% in December and was flat in 2007 as a whole. The forecaster projects a net market weakening of just over 1% in 2008.

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New car sales in 2007 turned out at 14.77m units.


While the German market suffered last year, it was offset by better results elsewhere, most notably in Italy. In 2008, the market looks set to come in lighter at around 14.6m units as the UK, Italy and Spain struggle, and despite the anticipation of a better result for Germany, as well as further growth for France.


In Germany, car sales were down a fifth last month (and down 9.2% in the year to 3.15m units). Retail sales remained weak in 2007 as consumers put off car purchases due to uncertainty surrounding the forthcoming new annual circulation tax for cars.


With the German government announcement which should provide clarity on the new tax expected in the first half of 2008, JD Power said it expects a market improvement to follow. Bearing this in mind, the second half of 2008 should prove better than the first, JD Power says.

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In the UK, the market put in a relatively solid performance, taking the total for the year to 2.40m units. Company registrations were strong in December and, indeed, were for much of 2007. The private retail side of the market has weakened, and will undermine the UK market in 2008, JD Power says.


The French market ended 2007 positively with a 21% increase for December, year-on-year. This does compare to a weak December 2006, though a selling rate of 2.26m units/year confirms the solid result for the most recent month and may reflect some pull-forward in purchases prior to the forthcoming CO2-based taxation scheme. JD Power maintains that improving consumer spending should help the French market this year.


The car market in Italy rallied in December, the final month of the scrapping incentive that lifted the market well last year. The December 2007 deadline was for new car orders, rather than registrations, and so strong sales will continue into the first quarter of 2008. After this, there will be a sharp decline in the market due to the pull-forward of sales into Q1.


Though there was pressure to renew the Prever Scrapping incentive in Spain, this incentive was removed in December 2007 — as a result, the selling rate leapt, though 2008 will prove weaker.


Overall, JD Power forecasts that the Western European car market will slip by 1.3% to 14.49m units in 2008.