European carmakers couldn’t shake the slump that’s shadowed them since September as new car registrations declined for the third month in a row—adding fresh worries to an industry already facing declines in its largest market.
- Automaker shares fell after the European Automobile Manufacturers Association reported passenger-car registrations slid 8.1 percent in the in November from a year earlier. That dragged down year-to-date growth to 0.6 percent in the European Union and European Free Trade Association area.
Key Insights
- The downturn, which started with the introduction of new emissions tests, is proving more stubborn than analysts expected. EY Consultancy said in November it saw a pick-up to normal levels soon. Partner Peter Fuss said he now expects December to be negative as well due to fewer shopping days.
- A sluggish December could throw 2018 into negative territory overall. Automakers would need to sell 1.05 million cars this month keep pace with 2017. That won’t happen if December registrations drop more than 8 percent from a year earlier.
- The U.K. and Italy—two countries mired political and economic uncertainty—have dragged down sales all year. While both fell in November, Germany, the biggest European market, led the downturn with a 9.9 percent drop in registrations.
- Carmakers are looking at a tough 2019 as well. BMW AG is facing at least 1 billion euros ($1.1 billion) in headwinds, the company said last week. Worries range from the Chinese market, which is declining, to a no-deal or chaotic Brexit scenario in March.
Market Reaction
- The Stoxx Europe 600 Automobiles Index was down 2.2 percent as of 9:23 a.m. in Frankfurt. Daimler AG declined 2.2 percent, while BMW fell 1.9 percent. French carmaker Renault SA was down 3.1 percent.
