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EU car sales grew everywhere in October, except the UK

·Germany Correspondent, Yahoo Finance UK
Workers install dashboards in Volkswagen ID.3 cars at the automaker's Zwickau assembly plant in Zwickau, Germany, September 13, 2019. Picture taken September 13, 2019. REUTERS/Joe White
Workers install dashboards in Volkswagen ID.3 electric cars at the automaker's plant in Zwickau, Germany, September 13, 2019. Credit: Reuters/Joe White

Passenger car sales across the European Union grew by a robust 8.7% last month, to 1,177,746 units, boosted by strong growth in Germany, France, Italy, and Spain.

Germany’s 12.7% growth in new car registrations in October helped to offset a drop in sales in the UK, where sales contracted by 6.7%. The UK and Cyprus were the only EU countries to see no car market growth last month, according to the European Auto industry association ACEA.

Mike Hawes, head of Britain’s Society of Motor Manufacturers and Traders said recently that the UK car market is “in need of an injection of confidence” after eight straight months of decline. “Whether the general election delivers a ‘bounce’ to the economy remains to be seen,” Hawes added.

Last month’s figures represented the best October for EU car sales since 2009. However, ACEA notes that the same month last year was marred by the introduction of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) tests. The strict new emissions standards caught many car manufacturers on the back foot, leading to backlogs as they scrambled to get cars compliant.

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Looking at the year to date, however, reveals a less positive picture. Overall, registrations are down 0.7% compared to the same 10-month period a year ago. From January to October 2019, Germany is the only country to show any car-market growth, while the UK’s sales volumes have dropped -2.9%.

Analysts are not expecting much growth in the EU car market for the remainder of the year, as economic issues like an overall slowdown in the global economy and Brexit continue to weigh on automakers.

Volkswagen, which recorded the biggest sales growth out of all carmakers in the latest ACEA report, cut its forecasts for sales growth and operating profit on Monday of this week, blaming a downturn in demand.

From the period 2016-2020, the world’s biggest carmaker expects sales growth to be 20%, not 25% as it previously predicted. VW chief financial officer Frank Witter noted: “It is fair to say that the very best of the party is over.”

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