European car sales struggling

Following the continued hike of petrol prices, European car sales are struggling which has hit many of the largest car manufacturers exports into the euro zone.

The ACEA European carmakers’ association revealed that car sales are down by 7.8 percent in May.

It is clear that buyers have been put off due to the economic climate as deliveries last month dropped to 1.33 million vehicles from 1.45 million compared to 2007.

Steven Pope, the chief global strategist at Cantor Fitzgerald in London, said that the reduction in sales has little to do with the auto industry itself as there is no pricing power simply because household budgets have been squeezed to such an extent, that luxury items such as cars have been put on hold.

Across the euro zone, registrations declined in Germany, Italy, Spain and the UK, but sales in France increased 7 percent.

In the aftermath of the first 5 months of 2008 the market leader, Volkswagen, saw its sales fall 8.1 percent in their domestic euro market in the month of May, whilst Japan’s Toyota Motor Group suffered a 21.6 percent drop in sales.

In the UK, after two months of growth, demand has fallen by 3.5 percent and with the current hikes in petrol and diesel prices, many potential car owners are considering their choices carefully.

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