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European car sales in further slump while UK rises

According to figures just released by the Association of European Carmakers (ACEA) sales of new cars across the EU fell again in May. Total sales of new cars in the EU for May fell by 5.9% to 1.042 million units, the lowest May figure since 1993.

According to figures just released by the Association of European Carmakers (ACEA) sales of new cars across the EU fell again in May. Total sales of new cars in the EU for May fell by 5.9% to 1.042 million units, the lowest May figure since 1993. In the five months of 2013 so far, a total of 5,070,840 new cars have been registered, a drop of an even steeper 6.8% on the same period for 2012. Some of Europe's biggest economies and largest car manufacturers have been particularly badly hit. France saw a 10.4% drop in May, with Germany at 9.9% and Italy 8%.

Crisis torn Cyprus recorded one of the worst falls, with a drop in sales of 41.4%, reflecting the desperate conditions in the country since the EU bailout. The rescue package that has been put in place prevents people withdrawing large amounts of cash from their banks, a situation that has undoubtedly contributed to the dramatic fall. The total number of cars sold in Cyprus was just 632. Astonishingly, this was not the largest drop. That dubious honour goes to Romania at 47%, a figure that will not ease concerns about the Romanian economy ahead of next January's lifting of immigration controls on Romanians entering the UK.

The figures provided a further stark contrast between the struggling EU industry and its UK counterpart. In the UK, by contrast, car sales in May rose by 11%. The May figures will come as a particular blow to EU manufacturers as April's numbers had recorded a slight rise of 1.7% in comparison with the same month in 2012. Hopes had risen that the downturn was over but now it appears that the decline is not finished yet.

The fall in car sales follows a similar pattern of weakened consumer spending across many sectors. In contrast to Britain, the EU has in fact been in recession for six consecutive quarters. Some manufacturers did particularly badly, with Peugeot, for example, seeing a 13.2% reduction. This comes on the back of the French company pursuing plans to close a factory and shed thousands of jobs, despite opposition from unions and court action in France. GM also had a bad month, losing 11.3% of its sales in May but Detroit neighbour Ford did better, recording only stagnant sales. With the UK manufacturers pushing ahead into new markets like China, it seems that their strategy is paying off.
 

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