Auto crisis worsens as global sales tumble

Auto crisis worsens as global sales tumble


Under the hood: Employees work at an assembly line of Hyundai Motor in Ulsan, southeast of Seoul in this undated photograph released by Hyundai Motor yesterday. Picture: Reuters
PARIS

Tuesday, December 2, 2008

AUTOMAKERS yesterday reported tumbling sales across Europe and Asia, taking fresh hits in the fight against plunging consumer confidence on the world's car lots.

"The financial crisis and the weaker economy is now hitting the auto market with full force," said Bertil Molden, chief executive of Swedish industry body Bil Sweden.

Spanish car sales nearly halved in November, the biggest fall in nearly 16 years and the seventh straight month of decline, as credit restrictions and soaring unemployment took their toll.

New car registrations in Sweden, home to struggling carmakers Volvo and Saab, nosedived by 36 per cent to 17,616 units in November, the largest monthly fall since 1993, according to industry data.

The Swedish government said it was talking to Saab and Volvo about loan guarantees but no specific sum had been discussed.

The Financial Times reported that GM and Ford had approached the Swedish government about financial aid "in anticipation of selling" their subsidiaries.

In France, headline sales at PSA fell over 17 per cent, with the Peugeot marque slumping by nearly 20 per cent and Citroen down 14.0 per cent.

Japan's overall car sales in November slid 18.2 per cent from a year ago, helping to push down platinum prices by seven per cent, while in South Korea, combined sales of domestic automakers, including Hyundai Motor Co, fell 8.6 per cent. Automakers worldwide are seeking help from governments to survive savage cutbacks in consumer spending and shift unsold cars.

In Europe, where car sales are already down 5.4 per cent in the first 10 months of the year according to industry association ACEA, manufacturers have announced production cuts and extended site closures in the fourth quarter to cope with the downturn.

Spain's government last week budgeted €800 million for its struggling car industry amid fears the sector could lose 50,000 jobs.

Spanish households have cut back spending on fears their economy will enter recession by year end and stay there much of 2009 as unemployment rises above 15 per cent.

The US Big Three car firms Ford, Chrysler and GM have called for aid from the Federal government to help them survive, while the European Commission has pledged to help the car industry. Reuters