Spain, Italy Report Large Decrease in Car Sales in Aug 2008

MILAN, Sept 1, 2008; Gilles Castonguay writing for Reuters reported that Spain and Italy suffered the hardest falls in the first batch of new car sales figures for August on Monday as signs of an economic slowdown kept drivers out of the showrooms.

The drop in sales in France and its neighbour Belgium were less dramatic. One reason is that France has an incentive scheme for the purchase of less-polluting cars.

But French champions Renault and PSA Peugeot Citroen have had to face the same difficulties as other European manufacturers -- concerns about the economy combined with inflation, high fuel prices and a credit squeeze.

They and other automakers face growing doubts about their ability to meet sales targets this year and the next. At least one -- Renault -- has cut its volume sales target for 2009.

Of the four countries in Europe to report new car sales on Monday, Spain was the most dramatic.

It recorded the biggest drop this year as sales fell 41.3 percent to 58,530 vehicles, the fourth straight month of declines, results from industry group Anfac showed.

Sales for the first eight months of the year came to 882,397 vehicles, down 21.1 percent.

Italy's sales fell for the eighth month in a row, down 26.42 percent to 77,156 units, the biggest monthly drop this year, according to government figures. For the first eight months, sales totalled 1,531,598 units, down 12.04 percent.

Sales at Fiat, the country's biggest car maker, fell 23 percent to 25,567, according to Reuters calculations.

Promotor, an Italian research group, said comparisons with the previous year were difficult because the Italian market had reached the end of an 11-year period of elevated sales, helped by tax incentives for the purchase of new, less-polluting cars in 2007.

In France, sales fell 7.1 percent, the country's CCFA car maker association said.

Renault showed a 0.2 percent fall in sales while PSA Peugeot Citroen sales fell 4.9 percent.

Belgian sales fell 2.7 percent to 32,954 units, according to Febiac, the Belgian Federation of Car Industries.

In Finland, sales were down 14.3 percent to 9,453 cars because of high fuel prices and high interest rates.

Germany's VDA car industry group publishes its numbers on Tuesday.

Additional reporting for Reuters by Sudip Kar-Gupta in Paris, Andrew Hay in Madrid, Phil Blenkinsop in Brussels, Tarmo Virki in Helsinki; Editing by Quentin Bryar