European Car Sales Drop as Brexit Concerns Hurt U.K. Demand

LAGOS (Capital Markets in Africa) – European car sales fell in September for only the second monthly drop this year as concerns about Brexit among United Kingdom. consumers more than offset gains in France, Italy and Spain.

Registrations declined 2 percent from a year earlier to 1.47 million vehicles, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said Tuesday in a statement. Figures were dragged down by a 9.3 slide in the U.K., the region’s second-biggest market. Top-ranked Germany slumped 3.3 percent, burdened by one less business daythan a year ago. Nine-month sales in the region rose 3.6 percent to 12 million autos.

The U.K. contraction was the sixth straight monthly decline and the first drop for September since 2011. The month is normally upbeat because of a buying binge to secure new license plates, which can help resale value. The pullback by British buyers amid the weak pound and stalled Brexit negotiations came as the British Chambers of Commerce downgraded its medium-term economic growth outlook in early September. French carmaker PSA Group said Monday that it’s cutting 400 jobs at a U.K. plant to adapt production to declining sales.

The U.K.’s weakness knocked carmakers with deep ties to Britain. Registrations at Ford Motor Co., the U.K.’s best-selling brand, plunged 13 percent Europe wide. German manufacturer Opel and British sister nameplate Vauxhall together sold 10 percent fewer vehicles in Europe, based on figures published last year. The ACEA didn’t release 2016 numbers for those marques on Tuesday following their purchase by PSA from General Motors Co. in August. Volkswagen AG, Europe’s biggest automaker, posted a 1.1 percent decline.

Shares of PSA fell 0.4 percent to 20.44 euros as of 9:42 a.m. in Paris as the company’s Peugeot, Citroen and DS brands posted a 1.6 percent sales decline in Europe last month. BMW AG’s stock slid 0.5 percent to 86.69 euros after the German luxury-car maker’s European registrations fell 2.1 percent, dragged down by a 5.4 percent drop at the U.K.-based Mini nameplate.

While demand contracted in the U.K. and Germany, other markets in the top five gained, with France rising 1.1 percent, Italy jumping 8.1 percent and Spain climbing 4.6 percent. The ACEA reports figures from the 28 EU countries, excluding Malta, as well as Switzerland, Norway and Iceland.

Source: Bloomberg Business News