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UK leads Europe's car market in its first annual decline since 2013

Munich

ANNUAL car sales in Europe dropped for the first time since 2013, led by a sagging UK market where concerns over Brexit turned off consumers - and have only intensified as politicians argue over the path to a divorce.

Passenger car registrations dropped 0.04 per cent to 15.6 million vehicles in the European Union and European Free Trade Association, according to the European Automobile Manufacturers Association.

This follows four months of straight declines after new EU emissions test rules came into force, leading to production bottlenecks.

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Carmakers battled mounting hurdles in 2018, prompting many, including Daimler AG and BMW AG, to cut profit targets. They are not expecting much of a reprieve in 2019.

Concerns for a disorderly Brexit have become worse and economic growth is slowing in Germany, the region's biggest market.

Continental AG this week gave a dour outlook for the year for the first half of 2019. BMW earlier said that Europe might stay flat because of the slowing economic backdrop.

With the decline in China, two of the world's biggest car markets fell last year and the US barely rose. The global downturn comes at a bad time for carmakers' bottom lines as they use up record funds to keep up in the shift to electric and self-driving cars.

Worries about trade tensions with the US on European-made cars continue to bubble in the background. While US President Donald Trump has held off on imposing new car import tariffs, the Commerce Department is working on a revision of its report into the matter. BLOOMBERG