Cutbacks Will Restrict Car Sales Growth

The Greek debt crisis has raised fears of contagion effects in Spain alongside Portugal and Ireland, making European carmakers concerned about a dragging recovery in the region's auto demand. On May 12, the Spanish government said it will cut public sector pay and curtail public investment by EUR6bn, which BMI believes will fall heavily on consumer demand, thereby prompting us to limit our vehicle sales forecast to just over 1mn by 2014, significantly less than the 1.36mn units sold in 2008.

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