European car sales fell slightly in September in what was only the second drop this year.
The devil is in the detail however, because when we break the figures down in to geographical regions, the real picture emerges. France, Italy and Spain are all posting positive numbers, whereas the 3.3% fall in like for like sales in Germany were somewhat suppressed by one less working day in the month than last year.
Good old Blighty was bringing up the rear with a whopping 9.3% fall, which for Europe's second largest market is a concern for everyone. More worrying is that this is the sixth straight monthly decline and the first drop for September since 2011. September is often a good month for car sales, as buyers tend to prefer to wait for new number plates to be released, which can help boost resale values.
For the first three quarters of the calendar year, new car registrations rose 3.7% to 11.7 million vehicles from 11.2 million a year earlier. Of the five biggest markets, the U.K. was the only one where sales fell, posting a decline of 3.9%. This news comes after the release from French car maker PSA who announced 400 job losses in the UK to deal with declining sales.
Perhaps this tells us more about the UK consumer and the weak pound than anything about European demand. Whilst weak UK demand isn't helpful for anyone, it is more palatable when the rest of Europe is motoring on. What will be interesting to track is whether or not the UK consumer is being as cautious with other discretionary purchases. With the vital December period approaching for UK retailers, we will be very interested to observe how this important period goes.
In general we remain underweight UK equities and favour overseas earners, which has proven to be a sensible call thus far. Given that Brexit appears to be biting, having a truly global approach gives us the flexibility to navigate these difficult markets.
French carmaker PSA Group (PEUP.PA) and U.S. competitor Ford (F.N) led a 2 percent decline in European car sales last month, according to industry data published on Tuesday. September registrations fell to a combined 1.466 million cars in the European Union and European Free Trade Area (EFTA), the Brussels-based Association of European carmakers said.