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Brexit UK suffers car-sales drop as Europe flourishes
[FRANKFURT] The UK is moving away from mainland Europe, and not just politically.
Sales of new vehicles in Britain, the region's second-biggest market, dropped 6.3 per cent in the first half of this year, extending last year's slide. The fall in demand runs counter to an uptick in sales for the continent.
Overall new-car registrations across Europe rose 2.8 per cent in the six months through June, led by gains in France and Spain, according to figures released Tuesday by the Brussels-based European Automobile Manufacturers' Association, or ACEA. Germany, the largest market, also eked out a gain of 2.9 per cent.
"The ongoing uncertainty over the UK Brexit arrangements has led to a noticeable pullback among fleet customers especially," said Peter Fuss, a partner as consultancy EY. "We expect sales in the UK to be weak at least until the fall, when hopefully we'll see tangible results from the negotiations with the European Union."
With Brexit less than a year away, and internal government ructions taking a turn for the worse, UK consumers are downbeat about the economy. Concern Britain may leave the EU without a formal deal in place is denting confidence and prompting more people to save rather than spend. Mortgage approvals have declined and retail demand has slipped.
Separately, luxury-car brands have continued to struggle even as buyers made a return during June. The uptick in sales -- as much as 9.9 per cent for the month for BMW models -- wasn't enough to offset a decline during the half the year as a whole when shoppers held back awaiting refreshed models like the BMW X3 sport utility vehicle.
The ACEA compiles car-sales figures from E.U., except for Malta, as well as Switzerland, Norway and Iceland.