Faced with declining sales of electric vehicles, major European automakers such as Renault and Stellantis are launching cheaper models to revive interest. At the same time, overall,
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European car sales posted their first consecutive monthly decline in more than two years in September as the region’s economy continues to stagnate and consumers cut back on spending.
The European Automobile Manufacturers Association said on Tuesday that new car registrations fell 4.2% from the same period last year to 1.12 million vehicles. The growth in electric car sales was not enough to offset the decline in sales of internal combustion engine models.
European automakers have been trying to boost sales in their domestic markets as a lingering economic downturn and rising interest rates cut spending. Stellantis NV, which owns brands such as Fiat and Peugeot, was among the biggest fallers, with registrations in the region plunging 26%.
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“The industry remains in crisis mode,” Constantin Gall, EY’s Western Europe mobility leader, said in a report. “There are no positive tailwinds towards the end of the year – the economy is softening, considerable geopolitics Tensions have not eased and are creating uncertainty for private and business clients.
While sales recovered slightly in the UK and Spain, sales fell in Germany, France and Italy, pulling down total deliveries in the region.
Electric vehicle sales rebounded in September, a welcome sign for the industry as demand for all-electric vehicles fell after the government scrapped subsidies last year. UK electric car deliveries surged 24%, with carmakers offering deep discounts to try to comply with government directives on zero-emission vehicle sales. In Germany, where the government is discussing the potential for new incentives, electric vehicle sales rose 8.7%.
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Sales of electric vehicles in the region are still down 2.6% so far this year. The outlook is further complicated by plans to impose tariffs of up to 45% on Chinese-made electric vehicles, expected to take effect in the coming weeks. The EU and China have pledged to work towards an alternative deal to avoid the levies, and German Chancellor Olaf Scholz reiterated his opposition to the tariffs on Monday.
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Europe’s largest automakers are now trying to revive sales with lower-cost models as consumers balk at the high cost of owning electric vehicles. Renault launched its new 25,000-euro ($27,053) R5 last week, while Stellantis started selling the 23,300-euro Citroën ë-C3 city car in mid-September.
Volkswagen AG, the region’s largest carmaker, is considering an unprecedented shutdown of its factories in Germany due to falling demand. Its sports car brand Porsche AG and rival Mercedes-Benz Group have adjusted their electric vehicle ambitions as plug-in models have less momentum than expected.
A Europe-wide slump in electric vehicles has increased risks for manufacturers such as Volkswagen, Stellantis and Renault, which face fines of up to 15 billion euros if they fail to meet tougher European fleet emissions rules set to take effect.
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First published date: October 22, 2024 at 3:01 pm IST