Car sales in Europe take a dive, plunge by 20% in the UK
EUROPEAN car sales fell in April as the shift of Easter from March reduced buyers’ time for shopping, while registrations in the UK were further sapped by tax changes.
With at least two fewer selling days compared with a year ago, industry wide registrations dropped 6.8 percent to 1.23 million vehicles last month, according to the Brussels-based European Automobile Manufacturers’ Association. Regional leader Volkswagen and fifth-ranked Ford lost market share to Fiat Chrysler and Renault, which are attracting customers with sport utility vehicles.
Sales plunged 20 percent in the UK after a new vehicle-excise duty went into effect on April 1. That could set the stage for further drops in demand amid the fallout from Britain’s preparations to exit the EU and a declining pound.
“Further weaker results are expected in the UK through this year, as the economy slows down, carprice rises feed through and the market eases back from a cyclically strong period,” Jonathon Poskitt, an analyst at LMC Automotive in Oxford, England, said in a report.
Car-sales growth is about to slow after three years of consecutive gains, as many consumers have already bought new cars. Buyers in the UK, Europe’s second-biggest market, begin to feel the Brexit economic pinch. The Easter holidays’ move into April this year hurt the annual comparison, because dealerships had less business.
European car deliveries rose to a nine-year high in 2016, as the market recovered from a two-decade low hit in 2013. Despite April’s poor performance, sales are set to inch higher again in 2017, albeit at a slower pace.
Demand is likely to pick up after economic confidence in countries using the euro jumped to the highest in almost a decade in April, signalling more consumers spending in coming months.
“The latest car-market results come in contrast to the solid economic news from the region,” Poskitt said. “We would assume the selling rate will pick up in the next few months from the weak April result.” – Bloomberg