Vehicle demand set to slow in spite of the economic uncertainty prevailing over the first half year, passenger car production in Europe has been stable in the first quarter, with a slight increase of 0.5%. Demand, however, is likely to contract over the course of the year as a consequence of deteriorating economic circumstances. Automotive forecasts point to a decrease of -2.7%. Demand for diesel powered cars remained firm, representing 53.1% of total new car registrations from January to June 2008. CO2- related car taxation is now levied in fourteen EU countries, with in some countries a marked impact on demand. This follows from the Economic Report 2008 second edition.