European car sales drive into a ditch amid a severe sector-wide slowdown

The European car industry was in turmoil today after dismal sales figures for June showed a severe sector-wide slowdown.

Last month car sales in the European Union dropped by 7.9%, according to the Association of European Carmakers, the biggest fall since December.

Registrations dropped to 1.49 million, compared with 1.62 million a year earlier.

The industry has been hit hard by weakening China demand amid the United States-China trade war as well as a slump in diesel demand.

All major markets reported a dive, including the UK, which posted a 4.9% fall to 223,400 car sales.

Germany, which only just avoided recession this year, saw sales drop 4.7% to 325,200, while Spain clocked up an 8.3% decline.

The worst was France, which posted an 8.4% drop.

The data comes a week after Mercedes-Benz maker Daimler reported a profit warning, while Nissan, Volvo, Fiat Chrysler Automobiles and BMW have also posted poor results in recent weeks.

Analysts also said the industry was undergoing a seismic change, as a sector-wide transition to electric vehicles and batteries hurt sales of traditional petrol vehicles.

Battery-powered car sales are still a fraction of European sales, but this could change quickly as tough emissions regulations come into effect next year.