Annual sales of new cars in the European Union (EU) will fall in 2019 for the first time in six years, a trade group said on Thursday.
The European Automobile Manufacturers Association (ACEA), which made this known in a statement, attributed the fall to slower economic growth in the bloc.
According to the group, sales are expected to shrink by one per cent compared to 2018, to just above 15 million units,
“This is also in line with the European Commission’s downward revision for projected EU gross domestic product (GDP) growth, as car sales strongly mirror economic growth,” ACEA said.
The group had previously forecast a 1-per-cent market expansion.
The last time year-on-year sales of new cars in the EU fell was in 2013. Annual growth was 9.3 per cent in 2015, 6.8 per cent in 2016, 3.4 per cent in 2017 and 0.1 per cent in 2018.
Trade tensions sparked by a tariff war between the United States and China and economic uncertainty from Britain’s planned withdrawal from the EU (Brexit) have recently weighed on the car industry.
ACEA secretary general Erik Jonnaert warned that “any additional barriers, costs or delays as a result of Brexit will pose a serious threat to jobs and growth in the auto industry, both in (Britain) as well as in the EU.”
News Agency of Nigeria (NAN) recalls that British car production fell by 14 per cent in March, the 10th straight month of declining output, due to sliding demand both at home and internationally.
Falling car sales in China and across Europe saw export production, which accounts for four out of five cars made in the U.K., drop by 13.4 per cent to 99,322 vehicles in the month compared with the same period in 2018, according to figures from the Society of Motor Manufacturers and Traders.
The number of cars made for the domestic market, which is also in decline, dropped by 18.1 per cent to 26,873.
Total production over the first quarter, which is typically the strongest for car making, fell by 16 per cent to 370,289 vehicles.
Car sales are falling across the U.K. and Europe after years of strong growth, leading to a squeeze on production.
Britain’s car industry saw output peak in 1.7m in 2016, from the previous trough of below 1m in 2009.
The fall comes as a new independent forecast for the industry predicts that car production will fall by 30 per cent if the U.K. leaves the EU without a trading deal.
Meanwhile, emission rules are threatening vehicle manufacturers in Europe as they begin to question their small- car strategy in response to costly new legislation covering safety and tailpipe emissions, in particular carbon dioxide output.
The regulations are about to wreak havoc among automakers with a stake in Europe, forecasters believe. Many say the age-old tradition of the European market — the dominance of the small car — is now in question.
Opel will drop its Karl and Adam minicars, while fellow PSA Group brands Peugeot and Citroen said their 108 and C1 minicars are unlikely to survive.