The European car market faced a dip in sales in September, marking the first continuous monthly decrease in over two years due to a stagnant economy and slashed consumer spending. The European Automobile Manufacturers’ Association confirmed a 4.2 per cent drop in new-car registrations from the previous year, slipping to 1.12 million units. Even a boost in electric vehicle (EV) sales couldn’t balance the downfall in usage of the traditional combustion-engine car.
Prolonged economic downturn and increasing interest rates have forced European automakers to grapple with poor sales in their domestic market. Of these, Stellantis, owning brands like Fiat and Peugeot, endured the most with their registrations plunging by 26 per cent in the region.
Constantin Gall of EY’s mobility division for western Europe said, “The industry remains in crisis mode,” and wrote off any immediate revival due to the economic downturn, geopolitical tensions, and uncertainty among customers.
While there was a slight surge in car sales in the UK and Spain, these were offset by the slump in sales in Germany, France, and Italy, bringing down overall sales across Europe.
However, sales of EVs got a slight boost in September, a ray of hope for an industry witnessing a decrease in fully electric cars after the withdrawal of subsidies last year. In the UK and Germany, EV sales grew by 24 per cent and 8.7 per cent respectively, boosted by heavy discounting and prospect of new incentives respectively.
Despite these surges, the year has seen a decline of 2.6 per cent in EV sales in Europe. This situation has been further exacerbated by anticipated tariffs of up to 45 per cent on Chinese-made EVs in the following weeks.
However, German leader Olaf Scholz echoed his disapproval of these tariffs and the EU and China aim to strike an alternate deal bypassing these levies. Given the consumer resistance to EVs due to their high ownership costs, leading automakers in Europe are focused on reinvigorate sales with cheaper models. Recently, Renault and Stellantis launched their models priced €25,000 and €23,300 respectively.
Volkswagen AG, the largest car manufacturer in the region, is considering an unparalleled shutdown of factories in Germany attributing to dwindling demand. Its performance vehicle subdivision, Porsche AG, along with competitor Mercedes-Benz Group AG, have recalibrated their aspirations for electric vehicles (EVs) due to slower-than-anticipated progress with the models reliant on plug-in power.
An across-the-board decline in EVs in Europe heightens the risk of penalties up to €15 billion for producers such as VW, Stellantis, and Renault, should they falter in adhering to the stringent fleet-emission regulations imminent throughout Europe. – As reported by Bloomberg.