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Car trade slumps  by 31% year on year

by CHRIS GRAEME [email protected]

December was the worst month in 2011 for car sales in Portugal in a year which saw sales plummet by 31% on 2010.

Sales of new vehicles in December were down a massive 60% on the same month last year.

While anticipated, the gravity of the fall in sales was higher than expected according to European Union statistics – the lowest recorded sales in 12 years.

And according to the Portuguese Automobile Association, the ACAP (Associação Automóvel de Portugal), the expectations for 2012 are none too rosy, with an expected reduction in sales of 20%.

But that figure could worsen if Portugal suffers a recession this year with an economic contraction of 3% or more.

The ACAP says it fears that showrooms and stands could close and staff be laid off.

The association says it doesn’t know how many companies are at risk of closure and refused to project exact figures for projected sales in 2012 but admitted they could be down by thousands.

Last year 153,433 cars were sold between January and December, leading the ACP’s president, Hélder Pedro, to admit that “Portugal has never sold so few cars since statistical records began in 2000”.

Yet industry insiders say they’ve never seen anything like it in 28 years of car sales.

The reason for the fall off in car sales is, on the one hand, a collapse in consumer confidence when it comes to buying non-perishable goods and a fall in overall economic activity and credit.

The turnover for car sales last year was just €200 million – half of the turnover registered in 2010 and worse than in 2009 at the height of the financial crisis.

The following year, 2010, saw a recovery in sales which rose by 38.8%, only to fall back again last year.

According to European Union figures, the car industry in Spain too suffered a slump in sales with record falls of 17.7%.