European car sales plunge in January amid austerity campaigns

Feb 16, 2012, 9:22 GMT

Berlin - The European new car market contracted sharply at the start of the year with auto registrations falling 7.1 per cent in January compared with the same month last year, the European Automobile Association said Friday.

This fall resulted in the total number of new registrations in the European Union dropping to 968,769, the Brussels-based ACEA said. Registrations fell 6.4 per cent year on year in December.

The slump in sales came against the backdrop of economic uncertainty unleashed by Europe's debt crisis and the moves by governments across the region step up austerity campaigns to knock their state finances into shape. This has left large parts of the region in recession.

The biggest fall was in Portugal, where registrations tumbled 47.4 per cent in January. Portugal has been hit by a marked economic downturn as it battles to come to grips with the debt crisis.

Also leading the overall decline last month was a sharp 20.7-per-cent slump in France and a 16.9-per-cent drop in Italy. France and Italy are the 17-member eurozone's second and third largest economies respectively.

However, Germany, which is Europe's biggest car market, reported only a modest fall of 0.4 per cent in the period under review. Spain posted a 2.5-per-cent gain.

The largest increase was in Romania, where registrations shot up 86.4 per cent.