Sales of cars in Spain plunge 24.3 percent
The Spanish car industry on Monday said the sector was on maximum alert after May sales recorded the biggest fall on record for the month.3 June 2008
MADRID - The Spanish car industry on Monday said the sector was on "maximum alert" after sales plummeted 24.3 percent in May from a year ago in what was the biggest fall on record for the month.
Faconauto, the association of automobile franchise holders, said the sector was looking at a potential "disaster" due to the slowdown in the Spanish economy sparked by a slump in the housing market and its knock-on effect on consumer confidence and durable goods purchases.
It called on the government to provide incentives for consumers to trade in older cars for new models.
Sales in the first five months of the year dropped 14.3 percent from a year earlier, almost by 100,000 fewer units. SUV sales in May plunged 36.2 percent.
Economy Minister Pedro Solbes on Monday insisted the economy was suffering from a "strong slowdown" rather than a "crisis". GDP growth slowed to an annual 2.7 percent in the first quarter from 3.5 percent the previous three months.
Meanwhile, NTC Research said yesterday its purchasing managers index (PMI) for the manufacturing sector in Spain fell to 43.8 points in May, its lowest level since November 2001.
Reuters quoted NTC's chief economist, Nathan Carroll, as saying the manufacturing sector is feeling the effects of the end of the construction boom.
[El Pais / Adrián Soto / Expatica]