U.K. Brexit Drama Hurts European Car Sales for Eighth Month

(Bloomberg) -- 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.

U.K. Brexit Drama Hurts European Car Sales for Eighth Month

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.

©2019 Bloomberg L.P.