ECONOMY

Car sales are slowing down

New car registrations in the first five months of the year fell 4 percent, according to data released by the National Statistics Service yesterday, as consumers slowed spending on big-ticket items during and in the aftermath of the war in Iraq. A total of 122,652 cars were registered in the January-May period, down from 127,759 units in the same period last year. The decline, however, was much smaller than the 6.7-percent drop recorded last year in the corresponding period. Car sales in May declined by a more moderate 1.3 percent. Declining car sales have been the norm for the last two years, said EFG Eurobank economist Platon Monokroussos. «Car sales went through a boom in 1999 and 2000 on the tail of the stock market boom four years ago. It’s logical to see a deceleration now. Sales in absolute numbers, however, are still high, so it’s not a cause for concern,» he said. Robust consumption spending has constituted a strong plank of the economy in recent years, as cheaper funding encouraged consumers to spend. The government is counting on strong consumption and investment spending to fuel growth this year, hopes that appeared to be vindicated by first-quarter statistics, which showed consumption expenditure up 3.8 percent. Monokroussos sees the trend of falling car sales continuing into the year, although sales could pick up slightly in the wake of the Bank of Greece’s decision to remove credit caps on consumer and personal loans. Improved sentiment related to firmer stock prices could also push up sales, he said. «These could spur car sales but the effect could be contained. In general, the trend is for slower car sales,» he predicted.