FRANKFURT (MNI) – The annual shortfall in Eurozone new car
registrations narrowed in March to 10.4% from February’s -11.8%, with
gains in only four member states, the Association of European Automobile
Builders (ACEA) reported on Tuesday.

The current economic environment does not suggest an upturn in new
car sales in the short run. Unemployment is at a multi-year high of
10.8%, jobless fears remain well above average and a significant
proportion of households are not optimistic regarding their financial
situation.

German car registrations rose 3.4% on the year to 339,123.
Households’ willingness to spend remains at a high level, underpinned
by the country’s robust labour market, according to the GfK research
group.

“In addition, consumers’ confidence in the stability of their
currency and the finance markets has noticeably fallen in the wake of
the debt crisis,” the GfK Group said this month. “As a result, consumers
are currently more likely to make high-value purchases rather than put
their financial resources in the bank at historically low interest
rates.”

In France, registrations in March were 23.2% lower on the year at
197,774. For the full year, automotive sector group CCFA expects
registrations to decline by some 10% to around two million, roughly in
line with the average over the past decade, according to spokesman
Francois Roudier. Figures for the first half are likely to be “very
bad,” but the launch of new models should support a gradual recovery
over the course of the year, he predicted.

New car registrations in Italy sank 26.7% to 138,137. A European
Commission survey showed that the proportion of consumers looking to
make major purchases over the next year remained well below average in
March, while worries about unemployment increased.

Spanish new car registrations were down a more modest 4.5% on the
year to 84,427. With an unemployment rate just below 24%, oil prices
still elevated and the economy in recession, Spaniards are unlikely to
open their wallets for anything more than the essentials. A recent PMI
report showed manufacturers and service providers trimming staff
further in March, suggesting that an upturn in discretionary spending is
a long way off.

In addition to Germany, the only other Eurozone states to see an
annual rise were Austria (+5.8%), Estonia (+28.5%) and Finland (+82.2%).
Figures for Malta were not available.

— Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com —

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