European auto sales continue to depend on the influence of government stimulus programmes. The main feature of February’s results was the sharp decline in Germany’s sales. They were down 30% versus February 2009. This supports the fears of those who saw stimulus programmes as simply bringing forward new sales, not creating new demand.
Overall, European sales were up 3%, due to the continuing stimulus programmes in Spain, up 47%; the UK, up 26%; Italy, up 21%; and France, up 18%. But it seems doubtful that these sales gains will continue beyond the end of government intervention.
Most worrying are the continued problems in Central Europe. In Hungary, for example, the government cannot afford a stimulus programme, and has instead had to increase VAT (sales tax). Sales went into freefall during 2009, and were down 78% in August. Last month they fell a further 58% versus February 2009. Only 3042 autos were sold – in a country whose population is 10m.
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