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Automaker shares fall on European weakness

The Associated Press

Automakers' shares sank in trading Wednesday on more signs of falling demand in Europe.

The European Automobile Manufacturers' Association says that new car registrations in the European Union fell 16.3 percent in December. This is just another turn in a 15-month downward spiral. The month's decline is the steepest recorded since 2008.

Europe's economic woes have led consumers there to dramatically limit spending. Over the whole year, demand for new cars reached the lowest level recorded since 1995.

The organization said most major markets recorded a double-digit downturn in December, including a 14.6 percent decline in France, 16.4 percent drop in Germany, 22.5 percent decline in Italy and 23 percent drop in Spain. The UK was the only major market to report a gain, up 3.7 percent for the month.

Automakers, aware of the decline in European demand for cars, have been cutting jobs and closing operations for some time.

Japanese automaker Honda said Friday that it will cut about one in four jobs at its UK factory due to weak demand. In October, Ford closed a major plant in Belgium and a day later, said it would close two plants in Britain.

And General Motors is struggling to make a profit in Europe. The company said it should be able to cut its European loss by one-third to one-half this year even as the region's economy falters. The company predicts that Europe will be profitable by 2015. GM has lost billions of dollars in the region in the past dozen years.

Shares of GM fell $1.35, or 4.4 percent, to $29.25 in afternoon trading. Ford's shares fell 11 cents to $14.19 after falling as low as $14.01 earlier in the day. Honda's U.S. shares dropped 40 cents to $37.74.