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Europe’s Car Market Is Getting Even Worse 

European car sales declined for a seventh straight month in March as several countries struggled with slowing growth. 

Europe’s Car Market Is Getting Even Worse 
An employee inspects a Volkswagen automobile in the used car sales area of the Volkswagen AG showroom (Photographer: Krisztian Bocsi/Bloomberg)  

(Bloomberg) --

European car sales declined for a seventh straight month in March as several countries struggled with slowing growth, adding to challenges for an industry shouldering record spending on electric and connected cars.

Automotive shares in Europe still rose after China beat expectations for first-quarter growth. Volkswagen AG, which sells about 40 percent of its vehicles there, gained as much as 1.6 percent rise with similar rise in the Stoxx Europe 600 Automobiles & Parts Index.

Prospects of an uptick in China, after 10 months of market contraction, would offer positive momentum in a global car market pullback where Europe is showing little sign of a turnaround. Italy, where the economy is already shrinking, may weaken further while falling car sales in Spain are in line with forecasts for a slowdown for an economy that’s been resilient so far. Germany, the continent’s biggest market, barely skirted a recession at the end of last year, and prospects for recovery remain dim.

Registrations in Europe dropped 3.6 percent in March to 1.77 million cars, the European Automobile Manufacturers Association said Wednesday. Italy led the declines among major markets with a drop of almost 10 percent, followed by Spain.

Bleak Environment

“An improvement in new car registrations isn’t on the horizon in light of the bleaker economic environment, the endless Brexit debate and political risks,” EY consultancy said in a report.

Volkswagen was up 1.2 percent at 158.54 euros at 10:33 a.m. in Frankfurt trading, trimming losses over the past year to 7.1 percent.

Europe’s Car Market Is Getting Even Worse 

For the quarter through March, sales fell 3.2 percent in the European Union and European Free Trade Association countries, the ACEA said.

A softer market adds to headwinds for carmakers battling sliding profits that prompted BMW AG to intensify measures designed to save 12 billion euros ($14 billion) by 2022. Rival luxury-car maker Daimler AG is also looking for cost reductions. Pressures are set to intensify in the EU next year with tighter regulation on carbon dioxide emissions, while uptake of electric vehicles remains at a fraction of total deliveries.

The industry may face EU penalties of 30 billion euros with Volkswagen AG still working on reducing a deficit on CO2 goals, VW’s Diess said Tuesday.

To contact the reporters on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net;Elisabeth Behrmann in Munich at ebehrmann1@bloomberg.net

To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Andrew Noël

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