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Business News

Car sales in Europe in a dive as debt crisis bites

European car sales plunged to a 19-year low in 2012 as the debt crisis took a heavy toll on vehicle demand.

The number of cars sold in the EU fell by 8.2 per cent to 12.05 million vehicles last year, the lowest since 1993.

Over-indebted banks refused to lend to consumers who are strapped for cash as severe austerity measures pushed joblessness across the bloc to a record high of 12 per cent.

Sales in December were hit particularly hard, falling by 16.3 per cent to 799,407 vehicles, according to the latest figures from the ACEA European automotive association.

For the year, the UK fared much better than Europe, with sales rising by 5.3 per cent. By contrast, sales in Germany declined by 2.9 per cent, while Spain dived by 13.4 per cent, France by 13.9 per cent and Italy by 19.9 per cent.

Although the UK market is holding up, British-based manufacturers are feeling the squeeze in Europe, which typically accounts for about 40 per cent of its sales.

Last week Honda announced it would cut 800 jobs at its plant in Swindon, although Jaguar Land Rover two days later said it would create 800 jobs in Sollihull.