Volkswagen scandal puts brakes on European car market

The 2017 Volkswagen Beetle Dune is on display at the Los Angeles Auto Show.

The 2017 Volkswagen Beetle Dune is on display at the Los Angeles Auto Show.

European car market growth slowed in October, the European Automobile Manufacturers Association (ACEA) said as the Volkswagen emissions scandal took its toll on auto sales.

Passenger car registrations were up by just 2.9 percent from October 2014 in the EU, a sharp slowdown from the 9.8 percent rise reported in September.

“October marks a break in the trend,” said Flavien Neuvy, head of Cetelem’s automobile research division.

“The Volkswagen affair may have caused collateral damage. We can’t rule out that the size of the scandal has been such that drivers have canceled or postponed purchases,” he said.

Deliveries of Volkswagen group cars were down by 0.5 percent in October, but the German manufacturer remains European leader with a market share of 25.1 percent.

The carmaker said last week sales of VW brand cars worldwide fell by 5.3 percent in October, as it halted deliveries of some diesel models it has admitted violate pollution standards.

“Demand for new passenger cars saw momentum slowing down in all major markets,” the ACEA noted.

The UK market, Europe’s second-biggest, actually shrank, by 1.1 percent, in October.

Other markets kept growing, but less so than in recent months. The German market rose by 1.1 percent, France by 1.0 percent, Italy by 8.6 percent and Spain by 5.2 percent.

Despite the October downshift, the figures still confirmed an upward car market trend that has been unbroken for 26 months, the ACEA said.

A total of 1.1 million new cars were registered across Europe in October.

Despite the sudden slowdown, October figures have put no more than a dent into the car market’s performance for all of 2015.

For the first 10 months of the year, registrations were up by 8.2 percent, translating into 11.5 million new cars on European roads.

Over that period European champions were Spain, up 20.5 percent and Italy, 14.7 percent higher, with both countries “benefiting from economic recovery and relatively low base comparisons.”

The UK market was up 6.4 percent in the 10 months to October, France 5.7 percent higher and Germany up 5.1 percent.

Jean-Francois Belorgey, auto expert at consultants EY, said the release of November figures should give “a much clearer idea” on the lasting impact of Volkswagen’s emissions scandal because VW was still delivering cars ordered before the scandal broke.

“They had a very big book of orders which they are now delivering,” he said.

Volkswagen is struggling to cope with the biggest crisis of its history following its admission in September that it had fitted 11 million vehicles with devices designed to cheat pollution tests.


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