German and UK auto reports add to European vehicle sales gloom

Here, there were 25,736 new car registrations in July, down from 27,336 during the same month last year, with the largest fall seen in electric cars, data shows

New cars registered in Ireland during July dropped nearly 6% as numerous car companies continue to deal with the falling demand in the electric car market and increasing competition.

Updates from the UK and German auto markets show a darkening mood in the sector over weak demand for electric vehicles (EVs).

Britain's auto industry body has cut its 2024 forecast for new car sales, which are expected to be at 1.97 million units, down from an earlier forecast of 1.98 million units, the Society of Motor Manufacturers and Traders (SMMT) said.

The forecast cut comes even as new car sales in July rose 2.5% year-on-year to 147,517 units, its 24th consecutive month of growth, as per SMMT data. 

"With zero emission vehicles mandated to comprise a minimum 22% of each brand’s new car registrations over the full year, the pace of transition needs to increase significantly," the SMMT said.

Last week, the as numerous car companies continue to deal with the falling demand in the electric car market and increasing competition.

Data from the Society of the Irish Motor Industry (Simi) shows there were 25,736 new car registrations during the month, down from 27,336 during the same month last year. The largest fall was seen in electric cars, with 3,147 registered, down 24.7% year-on-year.

The UK body also cut the annual forecast for the battery electric vehicle (BEV) market share to 18.5% from 19.8% expected earlier.

"Weakening private retail demand, particularly for EVs and despite generous manufacturer discounts, is the over-riding concern" SMMT chief Mike Hawes said in a statement.

Separately, Germany’s carmakers are growing gloomier about their prospects after a disappointing earnings season marked by waning EV sales and weakness in China for companies including Volkswagen and Mercedes-Benz Group.

Business expectations by the German auto industry deteriorated to minus 18.3 points in July, from minus 9.5 points the month before, according to a survey by the Munich-based Ifo Institute published on Monday. Several manufacturers have reported poor financial results in the past weeks.

The German auto industry is struggling with waning demand for EVs after spending billions to ramp up the technology. It is also under pressure in China, where sales are slowing due to a deepening home sales crisis. 

Mercedes trimmed the upper range of its annual margin forecast last month, while Volkswagen is pledging deeper cost cuts to counter the slump.

• Additional reporting Reuters and Bloomberg