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Drop in car sales in Iceland

The sale of new automobiles dropped by 36 percent last January compared to January 2006. In the first month of 2006, 1,479 new cars were sold in Iceland, but 1,084 in January 2007.

“We predict a 26 percent decrease in the sale of new cars this year, but proportionally sales will drop much more in the first three months of the year,” Egill Jóhannsson, the CEO of car dealer Brimborg, told Morgunbladid.

The first three months of 2006 saw a record sale in automobiles, so car dealers in Iceland had expected the sale in January 2007 to decrease even more comparably.

Jóhannsson said the record sale in first quarter of 2006 had come as a surprise because a decrease in car sales had been predicted last year as well. By the end of last year car sales had decreased by four percent compared to 2005.

The automobile market in Iceland has changed because customers are more concerned about CO2 emissions. “Diesel cars are more popular than they used to be,” said Knútur G. Hauksson, CEO of car dealer Hekla.

The price of cars has risen 14 percent in 12 months, and the Icelandic currency is registered at a 20 percent lower exchange rate than 12 months ago.

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