Falling car sales in Europe

Economic distress in Europe is bringing about permanent changes in the way people live their lives. With many people opting to travel using public transport instead of their own cars, it now emerges that they have taken to this mode of travel and would rather not own a car. They prefer to save up the money which they would spend on a car  for their retirement.

As such Europe’s car industry was undergoing a major crisis and this change is only dealing it more death blows. New-car registrations in Europe have fallen to nearly a two-decade low and most mass-market car makers are losing money. Moody's Investors Service Inc. has estimated that Peugeot Citroen, GM’s Opel, Fiat SpA, Ford could lose a combined €4.9 billion ($6.6 billion) in the region this year. And many fear that this is not just a temporary fall in car demand but could become a fundamental change in the very way in which people travel. Rising fuel prices, more-durable vehicles, the car's decline as a status symbol and fewer youth getting licenses has made buying new cars less of a habit for Europeans.

Structural demographic pattern is also responsible for this falling demand. A 2012 Morgan Stanley report projected that Europe's aging population alone could depress sales by 400,000 cars a year over that period. The population aged 15 to 65, according to an UN report is estimated to contract 1.4% over the next decade in Europe. This is in direct contrast to India and China, where cars have become a necessity, remains a status symbol and with a young population, demand is only expected to go up further. Same earth but such contrasting ways of life….