UK drags Europe’s car market to 1st fall since 2013

By BLOOMBERG

MUNICH • Annual car sales in Europe dropped for the first time since 2013, led by a sagging UK market where concerns over Brexit turned off consumers — and have only intensified as politicians argue over the path to a divorce.

Passenger-car registrations dropped 0.04% to 15.6 million vehicles in the European Union (EU) and European Free Trade Association, according to the European Automobile Manufacturers Association. This follows four months of straight declines after new EU emissions test rules came into force, leading to production bottlenecks.

Carmakers battled mounting hurdles in 2018, prompting many including Daimler AG and BMW AG to cut profit targets. They’re not expecting much of a reprieve in 2019. Concerns for a disorderly Brexit have gotten worse and economic growth is slowing in Germany, the region’s biggest market.

“We are increasingly cautious on the region,” Evercore ISI analyst Arndt Ellinghorst said in a note that updated an EU 2019 auto forecast to a 1% decline, citing weak industrial orders in Germany and eroding EU consumer confidence.

With the decline in China, two of the world’s biggest car markets fell last year and the US barely rose. The global downturn comes at a bad time for carmakers’ bottom lines as they use up record funds to keep up in the shift to electric and self-driving cars.

While US President Donald Trump has held off on imposing new car import tariffs, the Commerce Department is working on a revision of its report into the matter.