Registrations dropped 3.6% in March to 1.77 million cars, the European Automobile Manufacturers Association said. Italy led the declines among major markets with a drop of almost 10%, followed by Spain.
The downturn in the region has extended beyond turmoil that started in September with the introduction of new emission testing rules.
Italy, where the economy is already shrinking, may weaken further while contracting car sales in Spain are in line with forecasts for a slowdown for an economy that’s been resilient so far. Germany, the continent’s biggest market, barely skirted a recession at the end of last year, and prospects for recovery remain dim.
“An improvement in new car registrations isn’t on the horizon in light of the bleaker economic environment, the endless Brexit debate and political risks,” EY consultancy said in a report.
For the quarter through March, sales fell 3.2% in the European Union and European Free Trade Association countries, the ACEA said.
A softer market adds to headwinds for carmakers battling sliding profits that prompted BMW AG to intensify measures designed to
€12bil save by 2022.
Rival luxury-car maker Daimler AG is also looking for cost reductions. Pressures are set to intensify in the EU next year with tighter regulation on carbon dioxide emissions, while uptake of electric vehicles remains at a fraction of total deliveries.