Car sales in Europe slid for the fifth straight month, again painfully confirming the immense dislocations being caused by the controversial Worldwide Harmonised Light Vehicle Test Procedure (WLTP) that became mandatory from Sept. 1, 2018.
Passenger car registrations in January plummeted 4.6 percent to 1.23 million vehicles from 1.25 million year-on-year in the European Union (EU) and European Free Trade Association (EFTA), said the European Automobile Manufacturers Association (ACEA). Sales fell in all of Europe's largest markets: Germany, France, the U.K., Italy, and Spain.
Experts said car sales have not shown growth since WLTP came into effect in September. WLTP is a globally harmonized standard for determining the levels of pollutants and CO2 emissions, fuel or energy consumption, and electric range from light-duty vehicles (passenger cars and light commercial vans).
This unwelcome fall is another tough mountain to climb for European car makers already having to contend with an economic slowdown in eurozone economies; consumer worries over Brexit and Trump's trade war with the world.
Fiat Chrysler Automobiles Group (the world's eighth largest automaker), Ford and Volkswagen led the drop in European car registrations in January. Fiat Chrysler sales plunged the most, or by 14.9 percent. Ford's sales dropped 6.6 percent and Volkswagen Group by 6.4 percent. Nissan, a partner in the Renault Alliance, fared the worst; its sales fell a massive 24.7 percent, said Reuters.
Industry experts attributed much of the drop to the WLTP. This tough emissions standard forced some European carmakers to stop deliveries of some models yet to be certified under WLTP. They noted that European car sales surged in August 2018, the month before the new procedure became effective.
Sales have fallen every month since. More worrying, the head of Germany's most powerful labor union in Munich predicted employment in Germany car sector would begin declining this year.
"The EU auto-demand cycle has peaked," said Bloomberg Intelligence.
Of Europe's five major markets, Spain saw the largest decline in registrations with a drop of 8 percent, according to ACEA. Sales in Italy tumbled 7.5 percent.
A No-Brexit Deal, the only logical outcome this late in the game, is giving car makers massive headaches. Renault SA this week warned it will only be able to meet its forecasts if the UK leaves the EU with a deal. Earlier, Ford Motor Company said a No-Deal Brexit will be "catastrophic' for the U.S. automotive sector and its own factories.
