Amid rising concern over government debt and economic weakness on both sides of the Atlantic, Western Europe’s car market has posted a poor result for July.

JD Power Automotive Forecasting said that July’s car market in Western Europe declined by 1.6% in July. One less selling day did not help the situation, but the seasonally adjust annual running rate, at 11.7m units, is the lowest in a year, JD Power said. After the disappointment of a year-on-year fall in June, the July result is ‘another blow to the fragile West European car market’, JD Power said.

JD Power also said that thee month average selling rate for the region was 12.6m units/year, which ‘is still disappointing’.

One bright spot was the German market – up 10% year-on-year, though a selling rate of just under 3m units shows some retreat over the 3.21m units/year average for the first half of the year.

“The German car market started off brightly this year, but it has lost momentum in recent months,” said JD Power analyst Jonathan Poskitt. The German car market forecast for 2011 has now been revised down to 3.2m units, which would represent a 10% gain on last year. 

JD Power noted that the Italian selling rate fell to a ‘worryingly low’ level last month, at 1.45m units/year, which is the lowest rate since the mid-1990s. Difficulties regarding the wider economy and weak consumer confidence are clearly having a major impact on the market in Italy.

The French car market continues to operate at a lower level than earlier in the year, though JD Power said that this is to be expected given the boost relating to government scrappage support continued into the first quarter of 2011. ‘A running rate of 2.1m units/year may not be considered that bad in this context, certainly when looking at how some of the other large markets in the region are struggling.’

Market conditions in Spain remain very troubling with the selling rate below 800,000 units/year in July for the first time in 2011. With unemployment over 20% and ongoing questions over the country’s financing, the outlook for the Spanish car market looks particularly weak.

As a result of recent market weakness, JD Power has revised its forecast for the Western Europe car market in 2011 down to 12.84m units, which would constitute a 1.1% decline on 2010.