Wed, May 17, 2017 - Page 10 News List

Europe auto sales drop; British tax hurts demand

CONSUMER SPENDING:Demand is likely to pick up, with economic confidence in eurozone countries jumping to its highest in almost 10 years last month

Bloomberg

European automotive sales fell last month as the shift of Easter from March reduced buyers’ time for shopping, while registrations in the UK were further sapped by tax changes.

With at least two fewer selling days compared with the same period last year, industrywide registrations dropped 6.8 percent to 1.23 million vehicles last month, the Brussels-based European Automobile Manufacturers’ Association (ACEA) said.

Regional leader Volkswagen AG (VW) and fifth-ranked Ford Motor Co lost market share to Fiat Chrysler Automobiles NV and Renault SA, which are attracting customers with sport utility vehicles (SUVs).

Sales plunged 20 percent in the UK after a new vehicle-excise duty went into effect on April 1. That could set the stage for further drops in demand amid the fallout from Britain’s preparations to exit the EU, including a declining pound.

“Further weaker results are expected in the UK through this year, as the economy slows down, car-price rises feed through and the market eases back from a cyclically strong period,” UK-based LMC Automotive Consulting analyst Jonathon Poskitt said in a report.

Automotive-sales growth is about to slow after three years of consecutive gains, as many consumers have already bought new vehicles and buyers in the UK, Europe’s second-biggest market, begin to feel Brexit’s economic pinch. The Easter holiday’s move into last month this year hurt the annual comparison because dealerships had less business.

Demand is likely to pick up after economic confidence in countries using the euro jumped to the highest in almost 10 years last month, signaling more consumer spending in coming months.

“The latest car-market results come in contrast to the solid economic news from the region,” Poskitt said. “We would assume the selling rate will pick up in the next few months from the weak April result.”

Volkswagen Group’s European sales fell 9 percent, narrowing the German company’s market share to 24.8 percent from 25.4 percent a year earlier, as demand at the namesake VW brand as well as the Audi and Porsche marques dropped by more than 10 percent. Ford’s registrations in the region slid 12 percent, while Opel and Vauxhall, the European nameplates that General Motors Co is selling to French competitor PSA Group, posted a 13 percent plunge.

Among the top 10 automakers in Europe, only Toyota Motor Corp, which ranks ninth, last month posted a sales gain. Renault, which makes the Kadjar and Captur SUVs, widened its market share to 10.6 percent from 10.1 percent in the same period last year, even with a 2.9 percent slide in demand.

Fiat Chrysler accounted for 7.3 percent of the European market, versus 6.8 percent in the same period last year, as a 52 percent surge at the Alfa Romeo brand following the rollout of its Stelvio SUV partly countered declines at its Fiat and Jeep nameplates.

Sales in Germany, Europe’s biggest market, dropped 8 percent, while declining 4.6 percent in Italy and 6 percent in France. The ACEA compiles numbers from the EU’s 28 member countries, excluding Malta, plus Switzerland, Norway and Iceland.

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