New car sales soar in Europe, thinking smaller

Europeans buy small cars with government assistance.

Western Europe saw a dramatic new car sales increase in October. Sales were encouraged by heavy subsidies for owners getting rid of older cars, "scrappage" they call it in British. And the smaller cars sold best. Huge increases were seen in sales at companies from Fiat to Renault, Chevy, Skoda, VW. Down in sales year to year: Saab, BMW, Mercedes, Audi. Japanese auto makers have a smaller share of the European car market than they command in North America or Asia.

A majority of the cars sold in Europe have long been new-generation diesel, meaning they run more efficiently and are cheaper to maintain than gasoline-burners. Fuel prices in Europe are double or even higher than that compared to U.S. prices. The fuel, diesel or gasoline, is more heavily taxed. Except Norway, most of Euroope depends on oil imports.

Car sales in eastern Europe continue to decline due to less government intervention there. The former Soviet satellite states are still much in love with the "free market" after years of central planning and Russian domination.