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Czech car sales up in 2008, tougher 2009 seen

Car sales in the Czech Republic rose 4.7% last year, the country's Car Importers Association said, but dealers are bracing for a tougher 2009 as the economic slowdown bites.

European car sales have tailed off, hitting the Czech economy's key driver, the automotive sector, and Czech car dealers started cutting prices in the final months of 2008 due to falling demand.

New registrations of passenger and light-utility vehicles grew to 203,647 in the Czech Republic in 2008, with growth well below 12.2% the year before, and the association said the fourth quarter dented the full-year figure.

Cars from Czech car maker Skoda Auto, a unit of Volkswagen, led brands with a 31% market share, down from 37% in 2007. Cars from Ford Motor Co and Renault were next best sellers.

To aid the car sector, the Finance Ministry has proposed allowing businesses to write-off the value-added tax (VAT) on a new car purchase, a step the association said could help.

“We can still expect growth by a couple of percents this year. (But) if this VAT change takes place, then growth could be in the tens of percents,” the association's secretary Pavel Tunkl said. (Reuters)