European car sales plunge for second year in a row after demand for diesel cars drops

European car sales plunge for second year in a row after demand for diesel cars drops
European car sales plunge for second year in a row after demand for diesel cars drops

European car sales look set to drop for the second year in a row, after figures show that new car registrations fell sharply in June. 

According to data from the Association of European Carmakers (ACEA) sales of new cars dropped by 7.9 per cent – the biggest fall recorded by the Brussels-based group since December 2018. 

Vehicle registrations were also down to 1.49 million, compared to the 1.62 million new cars registered a year earlier in June 2018. 

Weakening demand to blame

Jaguar cars at a dealer in London. The company will hope the electric shift can help boost its prospects (Photo: AP)

The ACEA pointed to calendar effects resulting in two fewer sales days in most markets for June accenting the decline. 

But the automotive industry has been hit hard by weakening demand in mainland Europe and a decline in interest in diesel vehicles, alongside a drop-off in China as the country’s government tries to boost its domestic electric vehicle (EV) sector. 

The ongoing trade war between Washington and Beijing has also had a significant impact, with several vital components becoming more expensive to import from part makers.  

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Since the beginning of 2019, total sales have dropped 3.1 per cent when compared to last year. 

The ACEA has revised its prediction for annual sales for 2019 to a 1 per cent drop. Before last year, the European car industry had enjoyed uninterrupted growth since 2013. 

“We are standing in front of a difficult second half of the year,” said Peter Fuss, a partner at EY consultancy. “Little positive impetus for the new car market in the EU can be expected in the coming months.”

Car makers feel the heat

Workers walk past cars at Vauxhall’s production plant in Ellesmere Port (Photo: Paul Ellis/AFP/Getty Images)

The ACEA revealed that Nissan experienced the worst decline of any firm, suffering a 27 per cent slump in June sales, while Volvo deliveries were down 22 per cent. 

Meanwhile, Honda registrations fell by 19 per cent, sales at FCA were down 14 per cent and BMW shifted 10 per cent fewer cars in the month. Both Daimler, Mercedes’ parent company, and the PSA Group posted 8.2 per cent sales slumps. 

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Last week, Daimler issued its fourth profit warning in just over a year due to the costs of a recall and allegations of emissions-tampering in diesel cars. In May, BMW reported its first loss in a decade in its main automotive division.

 Earlier this month, the Society of Motor Manufacturers and Traders said that UK car sales dropped 3.4 per cent in the first half of 2019. 

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