Car sales slide as auto industry crisis worsens

Paris: The global automotive industry faced a fresh wave of bad news on Monday, as data showed drops in Swedish, Japanese and South Korean car sales last month, with figures for France, Spain and Italy due out later in the day.

Automakers are cutting production as well as seeking help from governments to survive as they battle against the effects of the financial crisis and worsening economic climate on consumer confidence.

Registrations of new cars in Sweden, home to carmakers Volvo and Saab, fell 36 per cent to 17,616 units last month, the largest monthly fall since 1993, according to data from auto industry body Bil Sweden.

"The financial crisis and the weaker economy is now hitting the auto market with full force," Bil Sweden Chief Executive Bertil Molden said in a statement.

A report in the Financial Times yesterday said US carmakers General Motors and Ford had approached the Swedish government about aid for, respectively, Saab and Volvo, ahead of the possible sale of the units.

France, Italy and Spain were due to release Nov-ember data later in the day. European car sales are already down 5.4 per cent in the first 10 months of the year, according to the latest data available from industry association ACEA.

European car manufacturers including France's PSA-Peugeot Citroen and Renault have announced production cuts and extended site closures in the fourth quarter as they struggle to cut stocks of unsold vehicles by the end of the year.

In South Korea, combined sales of South Korean automakers, including Hyundai Motor Co, fell 8.6 per cent in November.

"The fourth quarter is likely to be pretty doomed for all car makers. However, the problem is the next year and no one is free from the impact of weaker demand and the credit crisis," said Cho Soo-hong, an auto industry analyst at Hyundai Securities.

Earlier, data showed Japan's overall car sales last month fell 18.2 per cent from a year ago.

Hyundai and South Korea's four other carmakers - Kia Motors Corp, GM Daewoo, Renault Samsung and Ssangyong Motor - sold 445,111 units last month, compared to 486,762 a year ago.