Good news coming out of the European markets- new car sales roles in October in many key regions, marking a positive change in an otherwise uncertain economic year in Europe. However, a significant driver for the increase was that sales fell during October of last year following a change in emissions rules.
Among the bright spots, German new car sales increased 12.7 percent, with Porsche and Audi seeing the highest percentage jump in new car registrations. Germany is up 3.4% year to date as compared to last year. Germany also saw commercial registrations increase 16% in October. Like in the US, German sales showed strength in SUV sales, followed by compact class of cars. Italy (where new car sales rose 6.7%, following September’s 14% increase) and France (new-car registrations rose by 8.7%) also boasted positive sales for the month. Automakers likewise showed strong sales in October, with Volvo reporting a 13.9% global sales increase in October.
In contrast, new car sales in the UK fell 6.7% in October after a modest 1.3% gain in September, amid worries about Brexit, a general election, and the economic impact. However, according to the Financial Times, electric and hybrid car sales jumped up to 10% of overall car sales in the UK. This surge was largely due to hybrid sales, but electric car sales also tripled.
Meanwhile, the slowdown in global car sales is impacting eastern European countries which heavily rely on auto manufacturing. Bloomberg reports 3-5% of workers in Slovakia, Hungary, Slovenia, and Romania are directly employed in auto production. Economic growth in these regions could be threatened by sales stagnation or drops. Forecasts for the remainder of the year suggest growth of 1.1% this year, as compared to 1.9% last year. Economists are closely watching the impact of the European auto market on this region.