Car Sales in Europe Continue to Decline
For the seventh month in a row, Europe saw a falling number of car sales, down 3.9 percent last month in comparison with March 2018. The number of cars sold this past March was 1.72 million, as opposed to 1.79 million one year prior.
The European Automobile Manufacturers’ Association, based in Brussels, reported that demand lagged in all major European markets. Italy, with a newly reduced economic growth target, experienced the biggest decline with a 9.6 percent fall in sales. Spain followed with a 4.3 percent fall, Britain with a 3.4 percent fall and France with a 2.3 percent fall. The contracting car sales in Spain align with predictions of a slowing economy.
Data shows that some carmakers experienced a boost and others a decrease in sales, and likewise in market share. Sales refers to the actual number of automobiles sold and market share refers to the percentage of industry-wide sales a carmaker captured.
While German carmaker Volkswagen grew its market share and lost a mere 1 percent in sales, its luxury brand Porsche saw a 19 percent decline in share, while Audi’s share increased by 1.7 percent. Renault experienced a slight sales growth of 2 percent. BMW had a 2.2 percent slip in sales, while another German luxury carmaker, Daimler, the parent company of Mercedes-Benz, saw a 13.3 percent fall. Japanese carmaker Toyota, with its hybrid cars now making up 51 percent of its total car sales in Europe, was able to slightly improve its European market share.
Last year, EU car sales were hit by the introduction of new emissions tests– the Worldwide Harmonized Light Vehicle Test Procedures. The new standards, which took effect on Sept. 1, 2018, “forced some automakers to cease deliveries until cars could be recertified under the new regulations.” However, with poor results continuing into 2019, the problem could signal a broader slowdown.
With the shift towards electric and self-driving cars being costly, global trade concerns mounting, and stricter carbon emission regulations adding onto manufacturing costs, some auto manufacturers have already been pressured to take action to guard profits.
Additionally, the ongoing possibility of a no-deal Brexit imposes risks that could contribute to the market downturn. In February, Renault SA “warned it would only be able to meet its forecasts if the U.K. leaves the European Union with a deal.” Plus, for German automakers such as Volkswagen and BMW, which depend heavily on exports, a no-deal Brexit could endanger about 100,000 jobs in Germany.
BMW hopes to see promising numbers from China, its largest market. Despite the slump in the EU, BMW Head of Sales Pieter Nota is optimistic about growth in China.
According to an article by Bloomberg, “prospects of an uptick in China, after 10 months of market contraction, would offer positive momentum in a global car market pullback where Europe is showing little sign of a turnaround.”