Economy, Auto

Europe Car Sales Slow on Brexit

Europe Car Sales Slow on BrexitEurope Car Sales Slow on Brexit

European car-sales growth slowed in June, as the British vote on exiting the European Union weighed on business and consumer confidence, according to a new joint report.

Registrations in the EU and European Free Trade Association markets rose 6.5% last month from a year earlier to 1.51 million vehicles, industry association ACEA, said in a statement.

June marked the 34th consecutive month of auto-sales gains in Europe, though the growth rate was the slowest since March.

First-half sales increased 9.1% to 8.09 million cars, according to Auto Europe and Bloomberg's joint report.

Rising demand in most large EU markets last month helped drive growth at Renault and Fiat Chrysler, along with Asian brands and European premium automakers.

Renault posted the strongest gains in June among the region’s 10 largest car sellers, with a 20% surge propelled by the main brand’s Captur, Kadjar and Espace crossovers.

Fiat Chrysler registrations were up 13%, boosted by 14% growth at Fiat brand, which has just launched its new Tipo compact car, and by a 16% gain in Jeep sales.

Among Japanese automakers, sales at Toyota and Lexus combined grew by 6.7% while Nissan's volume fell by 2.9%. Korean brands Hyundai and Kia saw their sales rise 13% and 14% respectively.

Premium automakers BMW and Mercedes-Benz had a good month. BMW brand sales rose 15% while Mini was up 20%. The Mercedes and Smart brands both had 16% gains.

  VW Brand Dips

Volkswagen Group's volume rose 1% with an 8.6% increase at Skoda offsetting a 0.6% fall at VW brand. Among other group brands, Audi sales were flat, Seat's volume fell by 2.3% and Porsche registrations were down 2.6%.

VW Group's market share dropped to 23.2% from 24.4% a year earlier with VW brand's share down 0.8 percentage points to 11.0%, as the automaker's emissions-rigging scandal continued to weigh down the company.

PSA Group's registrations fell by 1.1% with a 0.7% rise in Peugeot brand's volume contrasting with a 2.7% decline at Citroen and an 8.2% plunge in DS sales.

Ford's volume dipped by 1.1% while sales at General Motors' Opel/Vauxhall unit rose by half a percent.

Two of Europe's five biggest markets recorded double-digit sales gains, led by Italy and Spain where registrations rose 12% and 11% respectively, while French sales increased 0.8% and the region's No.1 market Germany posted 8.3% growth.

Of the top five national markets, sales declined only in the UK, the second-biggest, sliding 0.8%, weighed down by a 20% decline in VW sales and an uncertain economic outlook.

The June 23 referendum that approved the UK’s departure from the EU, known as Brexit, will probably hold back economic growth in countries using the euro, according to the European Central Bank, which has been keeping interest rates at or below zero in a stimulus drive.

"Drastically reduced consumer confidence in the UK following the Brexit vote will probably result in a significant hit to sales," Peter Fuss, an automotive analyst at consulting firm EY, said in a report.