Gloomy forecast for Western Europe car sales in 2012 image

According to a prognosis by U.S.-based Center for Automotive Research, 2012 will see a massive slump in new car sales in Western Europe, by as much as 5.3 percent.

The European debt crisis and the weakening economy will result in 5.3 percent decline in sales, says CAR director Ferdinand Dudenhoffer. “Western Europe will be the problem area of the auto industry in 2012. The year 2012 will be the worst year for car sales in Western Europe for 18 years,” Dudenhoffer was quoted as saying by the DPA press agency.

Sales in 2012 are expected to drop by 671,000 units, which is the equivalent production of two major car factories in Europe. The research company estimates that the global auto business will stagnate in the coming year, as losses in Europe will be compensated by growth in Asia, South America, the United States and Russia. However, automakers’ profits will be put under pressure because of the investments necessary to increase capacity in the developing regions.

China, the world’s largest car market, is also beginning to slow down, as the 48 percent increase from 2009 and the 32 percent increase from 2010 will be followed in 2011 by a modest 4 percent rise.