(Bloomberg) -- European car sales sank last month as the region’s biggest automakers grapple with a slowdown in demand that’s triggered an industry crisis.
New-car registrations declined 2% in November from a year earlier to 1.06 million units, led by sharp falls in France and Italy, the European Automobile Manufacturers’ Association said Thursday. Spain was the only major market in the region to see a rise in sales.
Automakers are battling a slowdown in sales in Europe, where consumers remain under pressure from higher living costs. The removal of electric-vehicle subsidies in some countries has further hit demand for low-emission vehicles, which tend to be more expensive than their combustion-engine equivalents.
Europe’s biggest carmakers including Volkswagen AG and Stellantis NV are speeding up their push to cut costs while trying to placate unions. The crisis has also taken its toll on auto suppliers as well as startups such as Swedish battery company Northvolt AB, which filed for Chapter 11 bankruptcy protection in November.
Sales of fully electric cars in Europe edged up 0.9% in November from a year earlier, ACEA said, helped by strong sales in the UK where discounts are boosting demand. They’re still down slightly from January through November. Plug-in hybrid registrations dropped 8.6% last month.
As European buyers struggle to warm to electric cars, registrations of hybrids without a plug are picking up. Sales of the vehicles, which are powered by combustion engines and smaller batteries, rose 16% in November.
Industry Slowdown
The industry’s slowdown is having far-reaching implications. VW is proposing layoffs and unprecedented factory closures, while Stellantis is trying to recover from a disastrous year that culminated in this month’s ousting of former Chief Executive Officer Carlos Tavares. Manufacturers are separately facing billions of euros in fines if they fail to meet stricter European fleet-emissions rules slated to kick in next year.
Suppliers have also announced drastic cost-saving measures in response to the slump in demand. Robert Bosch GmbH, ZF Friedrichshafen AG and Schaeffler AG are among the parts makers that are pursuing thousands of job cuts as the fallout hits the car industry’s supply chain.
Other industries are capitalizing on their problems. Germany’s defense companies are looking to pick up auto workers, with radar maker Hensoldt AG already in talks to hire full teams from two separate auto-parts suppliers.
--With assistance from Craig Trudell.
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