CAR sales in Europe fell in September for the first consecutive monthly decline in more than two years as the region’s economy continued to stagnate and consumers trimmed spending.
New car registrations fell 4.2 per cent compared to a year ago, to 1.1 million units, the European Automobile Manufacturers’ Association said on Tuesday (Oct 22). Gains in electric-vehicle (EV) sales were not enough to offset declines for combustion-engine models.
European automakers have struggled to improve sales in their home market as a protracted downturn and higher interest rates cut into spending. Stellantis, the owner of brands including Fiat and Peugeot, posted one of the biggest drops, with registrations plummeting 26 per cent in the region.
While sales picked up slightly in the UK and Spain, they fell in Germany, France and Italy, pulling down total deliveries across the region.
Sales of EVs bounced back in September, a welcome sign for the industry that’s seen demand for fully electric cars decline after governments pulled subsidies last year. EV deliveries jumped 24 per cent in the UK, where carmakers are heavily discounting to try to comply with the government’s zero-emissions vehicle sales mandate. In Germany, where the government is discussing the potential of new incentives, EV sales increased 8.7 per cent.
Year-to-date, EV sales in the region are still down 2.6 per cent. The outlook has been complicated by planned tariffs on Chinese-made EVs of as high as 45 per cent, which are scheduled to take effect in the coming weeks. The EU and China have pledged to work towards an alternative agreement that would avoid the need for levies, and German Chancellor Olaf Scholz reiterated his opposition to the tariffs on Monday.
With consumers baulking at the high costs of owning EVs, Europe’s biggest automakers are now trying to revive sales with lower-cost models. Renault unveiled its new 25,000 euros (S$35,589) R5 last week, while Stellantis started shipping its 23,300 euros Citroen e-C3 city car in mid-September.
The region’s biggest automaker, Volkswagen, is weighing unprecedented factory closures in Germany due to falling demand. Its sports car brand Porsche and rival Mercedes-Benz Group have adjusted their EV ambitions over less-than-expected momentum for plug-in models.
A Europe-wide downturn in EVs increases the risk for manufacturers such as Volkswagen, Stellantis and Renault to pay fines of as much as 15 billion euros if they fail to meet tighter European fleet-emission rules are set to kick in. BLOOMBERG
