| 12:05 PM EST

Car Sales in Europe Drop 57%

Industry worries that government aid won’t come until 2021.
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The bad news: New-car registrations across Europe plummeted a record 57% in May. The good news: It was better than the 78% drop in April.

By the Numbers

Total sales in Europe plunged to 623,800 units last month from 1.44 million in May 2019, according to industry group ACEA. But that was a whole lot better than the meager 292,200 vehicles sold in April.

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ACEA says deliveries for the year through May reached only 3.97 million units, down 43%.

The paltry totals aren’t surprising, since European markets have been shut down over the past two months by the COVID-19 pandemic. Dealer showrooms began to slowly reopen in May in many but not all national markets.

The health crisis hit hard in all five of Europe’s largest national markets. May sales sank 50% in Germany, France and Italy and dropped 73% in Spain and 89% in the U.K. Every major carmaker posted sales drops of at least 50%.

Plea for Government Aid

ACEA, which represents carmakers, along with supplier and repair trade groups, are pressing national governments and the European Union to help them recover. The groups estimate the crisis erased 2.4 million units of production and affected the jobs of 1.1 million auto industry employees.

The associations predict full-year revenue for suppliers will drop 20% this year. They add that independent vehicle repair facilities have seen their business activity shrink 85%.

The groups point out that weathering the economic impact of COVID-19 under the best of circumstances will mean leaner funding to develop technologies that make vehicles safer and cleaner.

The associations grouse that EU aid proposals remain “vague on their precise purpose.” They also fret that the bureaucracy involved in approving regionwide aid means that help isn’t likely to arrive until 2021.

Regulatory Deadlines

Then there’s the matter of the EU’s tougher carbon dioxide emission limits for 2020 and beyond. This year, producers are expected to cut fleet average emissions of carbon dioxide for most models to 95 grams per kilometer from the previous 130 g/km.

Noncompliance means fines of €95 ($104) for each gram of overage, multiplied by the number of vehicles involved.

Carmakers were struggling with the target before COVID-19 came along. Disruptions due to the pandemic mean that European automakers “will probably be unable to meet some regulatory deadlines,” the trade groups say. They note that regulators haven’t indicated any willingness to bend their timetable.

Next Steps

The trade groups are pleading for clarity in Europe. They’ll get it, but not as soon as they’d like. In the meantime, Europe’s automotive recovery appears to be stuck in the slow lane.

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