The credit crunch has had an adverse impact on the demand for new vehicles in western Europe, it has been revealed.

According to the Wall Street Journal, the decision of banks to adopt more stringent measures in the wake of the US subprime mortgage crisis means that consumers are finding it harder to purchase expensive items such as cars using credit.

As a result, the overall European new car registrations market shrunk by 0.3 per cent last month, and analysts have predicted only modest gains for the rest of the year.

However, while new car registrations fell by 1.6 per cent in western Europe, they rose by 20 per cent in the new EU member states.

What's more, both Daimler AG and BMW saw new registrations rise on last year's equivalent figures by 7.7 per cent and 13 per cent respectively, the European Automobile Manufacturers Association has reported.

This is largely due to a surge in demand from German customers, although this is slightly misleading as last year's sales were relatively weak due to a VAT hike in January 2007.

Meanwhile, the market's worst performer was Toyota, with a 10.5 per cent drop in new car registrations.

Source:

BMW, Daimler Buck Trend Of Falling Auto Registrations
http://online.wsj.com/article/SB120330257200774635.html?mod=googlenews_wsj

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