Although the U.S. car market has been fairly volatile over the past few months due to a credit crunch and ever-rising fuel prices, the European market has largely been able to weather the storm. However, as global economic conditions continue to worsen, the European market might be headed towards the biggest downturn in the last 40 years.

Some industry analysts are predicting a dramatic market turndown not seen since the 1960s and ‘70s, with a 20 percent decrease in consumer demand. “To put it bluntly, the rise in oil is having a profound and permanent impact on the fundamentals of our business — and not just in North America,” General Motors Europe president Carl-Peter Forster said.

Gas price in Europe are currently about double – or more – than what we pay here in the U.S.

However, because Europeans have much more fuel efficient vehicles than we have here – Europe’s average fuel economy is 35 mpg versus 25 mpg in the U.S. – new car sales are only expected to decrease about 3 percent this year, according to The Detroit News. But with no relief to fuel prices in sight, a 15 to 20 percent decrease in sales could be right around the corner.

“So far, the record-high oil prices have not resulted in a drastic change in consumer buying patterns comparable to the U.S. because European fleets have been skewed toward cars and smaller segments for a long time,” Maria Bissinger, European Head of Automotive and Capital Goods Ratings at Standard & Poors, told The Detroit News. “Nevertheless, weakening economic conditions in several main European countries are leading to reduced consumer confidence and delayed new-car purchasing decisions.”

Perhaps the scariest fact for the world’s automakers, new car sales in China – which has been one of the largest emerging car markets – were off the mark during the month of May.