European car sales down for fourth straight month as emissions testing continues applying skids to market

A fall in Chinese demand and tougher emissions testing continued to put the brakes on European car sales in December, which dropped for the fourth month in a row.

New car registrations dropped 8.4 per cent last month, said the European Automobile Manufacturers Association (EAMA), following an eight per cent drop last month.

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With the exception of Italy, which increased by two per cent, all major EU markets saw demand for cars contract during the last month of the year.

Last year’s introduction of more stringent emissions standards has prompted a decline in sales since September. Volkswagen’s reported sales were down 37 per cent that month, and Europe’s biggest manufacturers have continued to struggle adjusting to regulations.

VW’s sales were down just eight per cent in December, indicating it is slowly adapting to the new so called worldwide light vehicles test procedure (WLTP), but another manufacturing giant, Renault, saw sales drop 16 per cent.

German registrations were down more than six per cent year-on-year, French registrations down a whopping fourteen per cent and Spanish registrations down 3.5 per cent.

The news follows yesterday’s announcement that car sales were down 4.1 per cent in China on the previous year, according to the Chinese Association of Automobile Manufacturers.

China has long played a key role in growing profits for global manufacturers, and the end-of-year decline may have further driven down sales for Europe’s car makers.

Over the full year, car registrations remained “more or less stable”, said the EAMA, with full year growth reported at 0.1 per cent.

Although the increase is modest, it marks the fifth consecutive year of growth, with almost 15.2 million cars registered across the EU.

The announcement follows yesterday's news that the German economy grew at its weakest rate in five years in 2018, further signalling a global downturn.

Europe’s largest economy’s GDP grew by 1.5 per cent last year, compared with 2.2 per cent the previous year, according to data from the country’s Federal Statistics Office.

Earlier this month, the British Society of Motor Manufacturers and Traders (SMMT) said UK car sales fell for the second year running last year.

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Dealerships sold 2.37m new cars in 2018, 6.8 per cent fewer than it managed in 2017, and 12 per cent below 2016’s peak of 2.69m, the SMMT said, with continued uncertainty surround the terms of Brexit behind the stagnant market.

Last week Jaguar and Ford both said they would cut thousands of jobs in the UK, as both companies aim to limit the damage caused by Brexit uncertainty and declining demand for diesel.