UK car sales lag major European markets ahead of Brexit

[LONDON] UK car sales lagged other major European markets in September as consumers hold back on purchases due to uncertainty surrounding Brexit.

Last month's 1.3 per cent increase, driven by fleet demand rather than consumers, fell short of predictions, the Society of Motor Manufacturers and Traders lobby group said Friday. France and Germany posted 17 per cent and 22 per cent growth. Year-to-date registrations in the UK fell 2.5 per cent.

"We expected to see a more significant increase in September, similar to those seen in France, Germany, Italy and Spain," SMMT Chief Executive Mike Hawes said in the statement. "Instead, consumer confidence is being undermined by political and economic uncertainty."

With less than a month to go before the UK is set to leave the European Union and no agreement in place, Britain's automotive industry is bracing for the impact from a no-deal split, which could further dent demand. Manufacturers have warned that their just-in-time supply chains will be disrupted in such a scenario.

The latest figures "mask the continued low confidence of consumers caused by the political and economic uncertainty created by the continuing Brexit confusion," Peter Barnes, an analyst at DWF, wrote in a note.

The new car market declined by 49,000 cars in the first nine months of this year, the group said. Electric vehicles, including full electric and plug in hybrids, were the only bright spot. Battery-driven car sales more than tripled to 7,704 units in September, driven by deliveries of models including the Tesla Model 3 and Nissan Leaf. Plug-in hybrids sales grew a more modest 23 per cent, according to data from the group.

Last month, Jaguar Land Rover said it would close its British factories for a week in November to guard against disruptions to supply chains from a possible no-deal Brexit. The announcement followed a warning from more than 20 European trade groups that such a breakup would have an "immediate and devastating impact, undermining competitiveness and causing irreversible and severe damage."

BMW AG plans to halt production at its Mini plant in Oxford for two days on Oct 31, and said earlier that it would reduce output by eliminating a work shift in the event of a no-deal split.

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