EU car sales return to growth, but Brexit holding bloc back | Business| Economy and finance news from a German perspective | DW | 16.11.2017
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EU car sales return to growth, but Brexit holding bloc back

Car sales in the European Union enjoyed their strongest October in eight years, with new car sales up by almost six percent. But poor performance in Britain and Ireland is holding the bloc back.

Car sales returned to growth in the European Union in October after a sluggish performance in September.

France and Spain enjoyed some of the best figures, with notable increases of 13.7 percent — almost 1.17 million units — and there was also strong demand for new cars in Italy.

These are the strongest October figures since 2009, according data from the European Automobile Manufacturers Association.

Of the major carmakers, Toyotaenjoyed the sharpest percentage gain in European sales with a 14.4 percent increase in the first ten months of the year, expanding its market share to 4.7 percent.

Disappointing UK figures

Sales were up nearly everywhere in the bloc, with new car sales rising by 5.9 percent — but not in Britain.

Consumer confidence has been shaken by the uncertainty of the terms around Brexit, which contributed to a 12.2 percent drop in sales last month and a 4.6 drop from January to October.

Further evidence that Brexit is having a negative effect on the car market can be seen in Ireland, where car sales were down by 14 percent in October and 10.3 percent in the first ten months of the year.

Irish exports make up 11 of the top 15 European Union goods most exposed to the British economy, according to the Irish finance ministry.

"Brexit related uncertainty and the weakness of sterling are impacting negatively on the industry," the Society of the Irish Motor Industry (SIMI) said earlier this month.

Frankreich Benzin- und Dieselverbrauch (Getty Images/AFP/F. Tanneau)

Sales of diesel cars are on the decline across Europe.

Diesel takes a hit

The uncertainty around the future of the diesel engine has led to a further shift towards petrol and, to a lesser extent, hybrid and electric cars, with a further dip in sales across the continent.

In Germany last month, according to the nation's vehicle licencing authority KBA, diesels accounted for 34.9 percent of the 272,855 cars registered. A year ago diesels accounted for 44.2 percent.

Sales of diesels in France are down by 4.7 percent over the first 10 months of the year, accounting for 47.6 percent of the total, according to the French carmakers trade association CCFA. However, diesels still accounted for a majority of cars sold last year at 52.1 percent.

In Britain, uncertainly about taxation of diesels appears to be contributing to a downturn in overall sales.

"Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel," Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders said in a statement earlier this month.

"Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK," he added.

mds/hg (dpa, AFP)

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