Car sales slow worldwide

Global car markets that have been offsetting Europe’s faltering new cars sales are beginning to suffer in the wake of the global financial slump.

Concerns are growing about slowing sales in the previously flourishing Russian car market, where the economy had been buoyed by the high cost of oil.

Russian new car sales for August went up by only six per cent, compared with 22 per cent the previous month.

It’s sparked fears that the market there is beginning to saturate, although some analysts argue that the Georgia crisis could have caused the slow down.

Many global car-makers are banking on Russia for sales, with some manufacturers about to launch specific models aimed to appeal to buyers there. Mitsubishi, for example, recently revealed a new Pajero Sport (pictured) at the Moscow motor show; it's an SUV that's unlikely to come to Europe or America. Luxury marques like BMW and Mercedes had also been selling strongly in Russia.

Meanwhile, in Japan, the domestic car market has reached its lowest sales point in 34 years. Overall car production in the country was down 11 percent in August.

Increasing fears over the global credit crunch and falling demand in the US were in part to blame.

But even Toyota reported a big fall in domestic sales, driven down by rising unemployment in Japan and high inflation rates. Nissan was the worse affected, with domestic sales slumping 5.3 percent in six months.

Demand is also slowing in developing markets like India and China.

The sales slow-down will come as a warning to global car-makers. Markets less affected by the European and US financial turbulence may not yield the extra sales that had been predicted.