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Car Crisis: Demand Crashes Across Europe

(c) Sky News 2013

European car registrations fell by over 8% in 2012 according to official figures, as the crisis for carmakers shows no sign of slowing.

Over the last year, demand for new vehicles reached its lowest level recorded since 1995, with sales falling in most major markets.

A total of just over 12 million units were registered in 2012, the European automotive industry association ACEA (Milan: ACE.MI - news) said.

In December, new car sales declined by 16% in the European Union - the steepest monthly slip since 2008.

Two fewer working days on average helped send registrations tumbling by over 14% in France, 16% in Germany and more than 20% in both Italy and Spain.

Greece - where the eurozone's debt crisis originated - saw one of the steepest falls in new car sales at 33%.

It comes as tough austerity measures and record-high jobless figures in the eurozone hit consumers' ability to purchase new cars.

The UK continued to be the only significant market to see an increase in new car sales, which were up by 3.7% last month.

Recently released figures showed car registrations in Britain were at a four-year high in 2012 - but still around 50% below pre-financial crash volumes.

Carmakers worst hit by last month's slump were the General Motors (NYSE: GM - news) and Ford (NYSE: F - news) , which both saw sales fall around 27%.

But Korea's Hyundai (KSE: 011760.KS - news) and Kia - which offer affordable cars with long warranties - reported an increase in registrations of 10.5% and 6.8% respectively.

French company Renault saw a slump of 19% a day after it announced plans to cut 7,500 jobs by 2016.

The redundancies - which the carmaker said was in response to falling demand - make up 14% of Renault's French staff.

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