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The ‘brexit’ aggravates the decline of European registrations

Automotive News

About 11 of the 28 markets of the EU reduce their registrations in September

Uncertainty in the United Kingdom deepens the fall, which remains at 2% in the EU as a whole

grafico-actividad-sector-del-automovil 2017


Car sales in the European markets as a whole fell after a long period of strong growth. In the month of September, the countries of the European Union registered a total of 1.46 million registrations, 2.2% less than in the same month of the previous year, according to the data provided by the European employers of car manufacturers ACEA.

This decrease responds to “several natural movements in the markets”, the experts detail. Not in vain, there are 11 of the 27 markets that register less sales in September, with more pronounced falls in countries such as Denmark, Ireland, Lithuania or Switzerland. But, undoubtedly, the decline is deeper because of several uncertainties that attack the major European markets: the negotiation of the process of exit from the United Kingdom of the framework of the European Union and the crisis of diesel among German manufacturers by the scandal of the handling of polluting gas emissions.

From the ACEA explain that “the month of September 2016 was one of the fastest growing of the entire series, with which the comparison is bad.” Even so, “registrations in some of the five major European markets are slowing down, especially in the United Kingdom and Germany. The sustained growth in countries such as Italy or Spain can not fully compensate this decline, “they say from the ACEA.

In the accumulated of the year, the demand for cars and jeeps remains “upwards in the EU markets as a whole”, point out from the ACEA, with 3.7% growth between January and September and about 11.7 millions of new vehicles registered. In fact, only four of the 27 European markets fall: Finland, Ireland, Switzerland and the United Kingdom.

The British is the only one of the five major markets in the region that falls, with 3.9% less sales, while deliveries in Italy are up by 9%; in Spain, 6.7%; in France, 3.9% and in Germany, 2.2%. “The biggest growth comes, in fact, from the new EU Member States, where registrations grew by 13.8%,” explained ACEA.

The association puts the accent, in concrete in one of the causes: “The fall in the sales of United Kingdom is having a very significant impact in the sales of the European region and is explained precisely by the uncertainty that is generating the process of negotiation Brexit and the future of the country within the scope of influence of the European Union, “explained the employers.

“This fall was predictable, after so many months of strong growth,” explains Felipe Muñoz, global automotive market analyst at specialized consultancy Jato Dynamics. “But even so, it is also true that the situation in the United Kingdom is worsening the environment in general and will not improve in the short term, as long as the Brexit negotiations continue,” the expert explained.

The decrease of 9.3% in the United Kingdom in the month of September is not, therefore, a punctual event. The data of the British employers’ association SMMT highlights that it is the sixth consecutive month of falls, which represents a cumulative decrease between January and September of 3.9%, the highest reduction of the whole of the European Union. Sales to individuals fell by 8.8%, while sales to fleets and companies fell by 5.2% and 10.1% respectively in the month of September.

For Mike Hawes, general manager of the British employers of car manufacturers SMMT, the September data is “especially worrying” because it is a month that usually marks the health of the vehicle market. “Political uncertainty and the contraction of business investments are undermining the confidence of consumers and the companies themselves,” Hawes said.

And it is not easy to consider the second most relevant purchase for a family after a home when the average purchasing power of British households has fallen by 600 pounds per year (686 euros) compared to an economic scenario similar to that the United Kingdom enjoyed before the brexit victory, according to a study prepared by the National Institute of Economic and Social Analysis. “It is almost certain that the relative deterioration in the UK economy and the consequent fall in living standards over the last year are the result of the vote of British citizens in favor of leaving the EU,” the authors of the report say.

Also, largely as a result of the depreciation of the pound, the real income of households have fallen around 1.1% per annum in the second quarter of 2017, which entails four consecutive quarters of decreases, the worst streak since 2011. In this way, the purchase of a car “decides to delay”, they point out in the SMMT.

“In addition, the uncertainty surrounding the air quality plans that will be approved in different cities does not help purchases,” he said. Deliveries of diesel vehicles are the most affected by the fall in the market, with 21% fewer sales. Gasoline models fall 1.2%.

The British manager advocates, in this environment, for incentive plans to the scrapping as the Spanish PIVE plans that “have proven their popularity and effectiveness” in the renovation of the car park. He also asked that diesel and gasoline vehicles that are already in circulation not be penalized.

Noemi Navas – CINCO DIAS – Madrid 6 NOV 2017 (Translation Soft)

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