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UK Brexit drama hurts European car sales for eighth month
[MUNICH] European car sales declined for an eighth straight month in April amid weak demand in the UK, where consumers are putting off big-ticket purchases due to Brexit turmoil.
Monthly deliveries in the region dropped 1 per cent to 1.22 million cars, the European Automobile Manufacturers Association said on Friday. The decline was a steeper 4.1 per cent in the UK, where Goldman Sachs Group Inc has concluded three years of political uncertainty have left the economy 2.4 per cent smaller than it otherwise would have been. Economic growth is forecast to slow there in 2019.
During the first four months of the year, European car registrations declined 2.9 per cent to 5.01 million cars, with Italy and Spain leading the slump among the five major markets with drops of 4.6 per cent and 4.5 per cent respectively.
The weak showing in Europe mirrors poor sales in China, the world's biggest car market, where demand in April plummeted 16.6 per cent to further solidify the worst slump in a generation. The broad slowdown is undermining carmakers' plans for record spending towards the shift to electric cars.
A softer market is adding to headwinds for the manufacturers, with BMW AG and Daimler AG turning to cost-saving measures to remedy sliding profits. Pressures are set to intensify next year in the EU due to tighter regulation on carbon dioxide emissions. Sales of electric vehicles remains at a fraction of total deliveries.
US-China trade tensions have also put the car industry on alert. President Donald Trump will give the European Union and Japan 180 days to agree to a deal that would "limit or restrict" imports into the US of vehicles and their parts in return for delaying new car tariffs, according to a draft executive order seen by Bloomberg.