- New-vehicle registrations rise for 15th consecutive month
- Inflation, higher interest rates weigh on consumer demand
Passenger-car deliveries in Europe increased for a 15th month in October, even as inflation and higher borrowing costs weighed on consumer demand.
New-car registrations rose 14% from a year earlier to just over one million units, the European Automobile Manufacturers’ Association said, as manufacturers continued to work through order backlogs. Sales of electric vehicles made up about 15% of total deliveries.
Years of supply-chain disruptions have left Europe’s car market with high order banks that have buoyed sales as the economic outlook weakened.
While the eurozone is likely to dodge a recession, consumer demand for electric vehicles has shown weakness and Europe’s biggest economy, Germany, has stagnated.
In France, where registrations jumped 22% in October, government subsidies are offsetting lacklustre demand and supporting the country’s electric car transition.
Sales growth in Germany, Europe’s largest car market, dwindled to less than 5% last month, after Berlin ended state subsidies for company electric purchases and leases. Electric vehicle sales there grew by a meagre 4.3%.
Home to Volkswagen, BMW, Mercedes-Benz, and Tesla’s sole European manufacturing facility, Germany faces more uncertainty about its green initiatives after a ruling from the country’s top court last week jeopardised some climate spending plans.
The fallout for the car industry remains unclear, but the decision could affect future investment in the country’s chip industry and the rollout of charging stations, developments that could impede the transition to electric vehicles.
Europe’s car industry is still bracing for the possibility that trade terms with China could worsen after the European Commission started a probe into Beijing’s support for Tesla, Byd, and other local carmakers.
The investigation, which also involves BMW and other western manufacturers exporting electric vehicles to the EU, is expected to last roughly a year and could see Brussels impose additional import duties and retaliatory measures from China.
