2 December 2008

MADRID – Sales of new cars in Spain plunged 49.6 percent in November from the equivalent figure last year to 63,068 vehicles due to the economic slowdown, official automaker figures showed on Monday.

"This decline brushes on the biggest monthly drop in the history of the car market," the Spanish automobile manufacturers' association ANFAC said in a statement.

"Restrictions on access to credit, together with the continued loss of jobs and the lower income available to families is keeping consumer confidence levels at a minimum, limiting the sale of vehicles," it added.

New car sales dropped 40 percent in October over the month last year. During the first 11 months of 2008, new car sales dropped 26 percent over the same year-ago period to 1,470,394 vehicles. A sharp fall in demand for cars from the rest of Europe also caused the dip in sales. 

Prime Minister Jose Luis Rodriguez Zapatero's socialist government earmarked EUR 800 million of the EUR-11-billion- economic stimulus package which it unveiled last week to the country's ailing auto makers.

The automobile manufacturers' association said it hoped that the measures to help the sector "would be put in place quickly".

Spain's auto sector accounts for 8.4 percent of the country's gross domestic product (GDP) and 15 percent of its exports.

The Spanish economy, the fifth-biggest in Europe, has been battered by the impact of the global credit crunch which has crippled the key construction sector that was already weakened by oversupply and rising interest rates.

Spain's GDP shrank by 0.2 percent in the third quarter from the previous quarter, the first such decline in 15 years. Employment rate in Spain is at 11.3 percent and is the highest in the European Union.

[AFP / Expatica]