Ford vehicles sit loaded on a transporter train at the Ford Motor Co.’s engine assembly plant in Dagenham, U.K.(Photographer: Luke MacGregor/Bloomberg)  

European Car Sales Slump 23% as New Emissions Tests Start

(Bloomberg) -- Passenger car registrations in Europe slumped 23 percent during September after new emissions test rules took hold, reversing gains made in August when automakers were hurrying vehicles out the door to beat the deadline.

Key Insights

  • The tougher testing methods are designed to produce results more in line with real-world conditions. Volkswagen AG will struggle to meet delivery targets this year because of the new rules. Daimler AG has also singled out so-called WLTP as an obstacle weighing on its business
  • BMW, which hadn’t seen delays in getting its models ready for the new regime, issued a profit warning last month partly blaming pricing pressure from less-prepared competitors
  • VW on Tuesday said delays stemming from the introduction of the new test will be resolved by the fourth quarter for its namesake brand

Market Reaction

  • The STOXX 600 Automobiles & Parts Index fell 1.3 percent as of 11:09 a.m. in Frankfurt
  • Landesbank Baden-Wurttemberg analyst Frank Biller sees September sales as “neutral positive” for the industry

Know More

  • August deliveries of new passenger cars jumped 30 percent in the European Union and European Free Trade Association from a year earlier, according to data released by the European Automobile Manufacturers Association
  • In the year through September, sales are still up 2.3 percent at 12 million vehicles
  • New WLTP testing procedures are applicable from Sept. 1
European Car Sales Slump 23% as New Emissions Tests Start