HomeBusinessEU car sales rev up despite Brexit and ‘dieselgate’

EU car sales rev up despite Brexit and ‘dieselgate’

Car sales returned to growth in Europe last month, the latest industry data showed on Thursday, but that Brexit and the so-called dieselgate scandal are are making their impacts felt.

Sales of new vehicles climbed 5.9 percent in October compared to the same month last year, according data from the European Automobile Manufacturers Association, recovering from a 2.0 percent dip in September.

Over the first ten months of the year, sales of passenger vehicles have risen by 3.9 percent.

Car sales were up nearly everywhere on the continent, but not in Britain where consumer confidence has been undermined by uncertainty over the terms of the country’s impending exit from the European Union.

They tumbled by over 12 percent last month, and are down 4.6 percent in January through October.

Car sales are down even more sharply in Ireland, which is probably the EU nation most directly vulnerable to Brexit as Irish exports make up 11 of the top 15 European Union goods most exposed to the British economy, according to the Irish finance ministry.

They fell by nearly 14 percent in October and are down 10.3 percent in the first ten months of the year.

“Brexit related uncertainty and the weakness of sterling are impacting negatively on the industry,” the Society of the Irish Motor Industry (SIMI) said earlier this month.

The lower value of the pound has caused a surge of attractively priced used cars from Britain going on sale in Ireland, which is also a left-side drive country.

SIMI said that “with an increase in used imports of less than 3 years old, it is likely that some of these are displacing new car sales.”

– ‘Consumers need urgent reassurance’ –
The dieselgate scandal, sparked by Volkswagen’s 2015 admission that it fitted out millions of cars with software that enabled them to cheat pollution tests, appears to be having an impact on sales as consumers are shifting to petrol engines over environmental concerns or to stay clear of taxes and regulations being considered or imposed by EU countries.

In Germany last month, according to the nation’s vehicle licencing authority KBA, diesels accounted for 34.9 percent of the 272,855 cars registered. A year ago diesels accounted for 44.2 percent.

In France, sales of diesels are down by 4.7 percent over the first 10 months of the year, accounting for 47.6 percent of the total, according to the French carmakers trade association CCFA. Diesels still accounted for a majority of cars sold last year at 52.1 percent.

In Britain, uncertainly about taxation of diesels appears to be hitting overall sales.

“Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel,” Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders said in a statement earlier this month.

“Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK,” he added.

By carmakers, sales by European leader Volkswagen lagged in both October and the first ten months of the year, growing by less than the overall market. Its market share dipped to 23.6 percent for January to October.

The sales of PSA Group, which makes Peugeot and Citroen, were doped from the inclusion of Opel/Vauxhall into its accounts, but otherwise the carmaker was showing only modest increases above the overall gain in the market.

Of the major carmakers, Toyota was showing the biggest percentage gain in European sales with a 14.4 percent increase in the first ten months of the year, expanding its market share to 4.7 percent.

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