European June car sales slow after Brexit vote

Elisabeth Behrmann, Bloomberg

European car-sales growth slowed in June as the British vote on exiting the European Union weighed on business and consumer confidence.

Registrations rose 6.5 percent from a year earlier to 1.51 million vehicles, the weakest gain since March, as demand in the U.K., the region’s second-biggest market, slid 0.8 percent. First-half sales increased 9.1 percent to 8.09 million cars, the European Automobile Manufacturers Association, or ACEA, said Friday in a statement.

The June 23 referendum that approved the U.K.’s departure from the EU, known as Brexit, will probably hold back economic growth in countries using the euro, according to the European Central Bank, which has been keeping interest rates at or below zero in a stimulus drive. Prior to the vote, gauges of U.K. and euro-area economic confidence fell amid questions about how a pullout may affect companies and households. Most automotive shares have yet to fully recover from a global stock-market plunge that followed the ballot, while the pound is trading near a three-year low to the euro.

“Drastically reduced consumer confidence in the U.K. following the Brexit vote will probably result in a significant hit to sales,” Peter Fuss, an automotive analyst at consulting firm EY, said in a report. “Not least the German carmakers will see an impact in the form of lower exports to the U.K., as cars made in Germany get more expensive for British buyers because of the weak pound.”

June marked the 34th consecutive month of auto-sales gains in Europe. Of the five biggest national markets, growth in Germany, Italy and Spain exceeded the regional rate. The decline in the U.K. was the country’s first since October. The ACEA compiles registration figures from the 28 EU countries, excluding Malta, as well as Switzerland, Norway and Iceland.

Renault SA posted the strongest European sales growthlast month among the region’s 10 largest car sellers, with a 20 percent surge propelled by the main brand’s Captur, Kadjar and Espace crossovers. Daimler AG ranked next with a 16 percent jump, boosted by demand for sport utility vehicles at the Mercedes-Benz luxury nameplate. BMW AG, Daimler’s main competitor, also delivered 16 percent more cars in the region.

European sales by market leader Volkswagen AG, the German manufacturer mired in a diesel emissions-test cheating scandal, rose 1 percent in June, held back by declines at the namesake VW brand and Seat and Porsche divisions and by stagnant demand at the Audi marque. Its six-month market share narrowed to 23.8 percent from 24.9 percent a year earlier, remaining atthe lowest since 2011. June deliveries fell at PSA Group, the owner of the Peugeot and Citroen nameplates, as well as at Ford Motor Co. and Nissan Motor Co.