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European auto stocks suffered on Tuesday after new car sales fell 7.5% in January as the sector’s woes continued.
Renault RNO, -6.27% , which reported its first annual loss in a decade last week, was the sharpest faller as the stock dropped 6%.
The French manufacturer’s sales were down 16.3% in January compared with the previous year, according to data from the European Automobile Manufacturers Association (ACEA).
The EU passenger car market contracted 7.5% to 956,779 units last month, slowing from a 21.7% rise in December, due to weakening global economic conditions and Brexit uncertainty, the ACEA said.
Taxation changes by some EU countries pulled some sales forward to December 2019, which also explained the drop, it said.
Daimler DAI, -2.76% sales slipped 10% at the start of 2020 after it also posted its worst annual performance in a decade last year. The Mercedes-Benz owner’s sales had held firm at 3.3 million in 2019 despite softening global demand as it maintained its position as world’s best-selling premium car brand. But the slow start to 2020 sent the stock 2.3% lower.
Peugeot owner PSA UG, -1.12% reported a 12.9% sales slump and Volkswagen VOW3, -1.84% sales declined 0.4% as both stocks traded lower.
Fiat owner FCA’s FCA, -0.93% sales fell 6.7% but BMW BMW, -1.97% and Toyota 7203, -1.70% bucked the trend as new car registrations jumped 5.2% and 12.2% respectively.
Ford F, -0.80% sales dropped 22.7% to 46,258 in January as it fell below Daimler, Toyota and BMW in the rankings.
Car sales fell 13.4% in France, 7.6% in Spain and 7.3% in Germany, while sales in the U.K. declined 7.3%.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics said: “This headline isn’t pretty, but it was at least partly driven by mean reversion from the leap in December, driven by consumers pulling forward demand due to tax hikes on new cars in some countries at the start of the year. That said weakening global economic conditions and uncertainty caused by the U.K.’s departure from the European Union also added to the weakness according to the ACEA.”
He expected EU new car registrations to rise 2% to 3% in 2020, improving on the 1.2% rise in 2019, but predicted a slow start to the year.
European automakers struggled in 2019 as demand for cars remained weak and the rising costs of meeting emissions regulations weighed on the sector’s major players.
Renault said it expected the global automotive market to decline again in 2020, with Europe down at least 3%, while French auto parts group Faurecia EO, -5.00% said on Monday worldwide production would slip 3% this year.