Credit crunch 'hitting car sales'

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Escalating fuel prices have underlined the need to shop around for the best car insurance deals as governments are urged to restore consumer confidence.

The middle classes are being hit "to the bone", a motor industry chief has said as he appealed to politicians across Europe to act.

Carl-Peter Forster, president of General Motors Europe, warned that the credit crunch is hitting car sales. Speaking at the Paris Motor Show, he said: "In view of the gloomy market developments in Spain, Great Britain and Germany, there must be an end to the uncertainty."

Car manufacturers were showing off their latest products against the backdrop of an unprecedented set of economic challenges, said Mr Forster.

The UK, Ireland, Spain and Italy were especially vulnerable to the risk of recession due to the ongoing world financial crisis, compounded by price corrections in the housing market, he said.

"The deteriorating value of the British pound, compared to the Euro, is hurting sales. We actually sell more vehicles in the UK than we build there, and the weak buying power of the pound has put a new car purchase beyond the reach of many people who might otherwise be in the market right now.”

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