Brexit is already exacting a toll on U.K. business in the form of lost orders and customers, a drop-off in investment and increased costs for stockpiling and other no-deal preparations.
MUNICH: European car sales declined for an eighth straight month in April amid weak demand in the U.K., where consumers are putting off big-ticket purchases due to Brexit turmoil.
Monthly deliveries in the region dropped 1% to 1.22 million cars, the European Automobile Manufacturers Association said Friday.
The decline was a steeper 4.1% in the U.K., where Goldman Sachs Group Inc. has concluded three years of political uncertainty have left the economy 2.4% smaller than it otherwise would have been. Economic growth is forecast to slow there in 2019.
During the first four months of the year, European car registrations declined 2.9% to 5.01 million cars, with Italy and Spain leading the slump among the five major markets with drops of 4.6% and 4.5% respectively.
The weak showing in Europe mirrors poor sales in China, the world’s biggest car market, where demand in April plummeted 16.6% to further solidify the worst slump in a generation. The broad slowdown is undermining carmakers’ plans for record spending toward the shift to electric cars.
A softer market is also pushing manufacturers like BMW AG and Daimler AG to turn to cost-saving measures in a bid to remedy sliding profits. Pressures are set to intensify next year in the EU due to tighter regulation on carbon dioxide emissions. Sales of electric vehicles remains at a fraction of total deliveries.
BMW shares fell 0.5% and Daimler dropped 1.3% in Frankfurt trading while the Stoxx Europe 600 Automobiles & Parts Index was down 1.4%.
U.S.-China trade tensions have also put the car industry on alert.
President Donald Trump will give the European Union and Japan 180 days to agree to a deal that would “limit or restrict” imports into the U.S. of automobiles and their parts in return for delaying new auto tariffs, according to a draft executive order seen by Bloomberg. - Bloomberg
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