After a gradual slowdown, the European car market is now likely to go into reverse (PHILIPPE LOPEZ)

Paris (AFP) – The European car market is likely to shrink this year, a key industry body said on Thursday, citing Brexit, slowing EU growth and cyclical industry factors as reasons.

The European Automobile Manufacturers’ Association (ACEA), which groups 15 major Europe-based car, van, truck and bus makers, said the car market was now likely to drop by one percent in 2019 from last year, a downward revision from a one percent growth forecast made earlier this year.

“The association now expects a slightly negative result for the full year 2019, with total EU car sales projected to be just above 15 million units at the end of this year,” it said.

“Aside from the uncertainty due to Brexit and changing macroeconomic conditions, this represents a natural stabilisation of the market,” said ACEA Secretary General, Erik Jonnaert. 

He said the car sector’s expected sales fall was in line with the European Commission’s downgrade of projected EU GDP growth.

“Car sales strongly mirror economic growth,” he said.

But he also warned that Britain’s exit from the EU had the potential to do much damage to the European car sector.

“It goes without saying that any additional barriers, costs or delays as a result of Brexit will pose a serious threat to jobs and growth in the auto industry, both in the UK as well as in the EU,” Jonnaert said.

European car market growth has been decelerating in recent years, reaching just 0.1 percent in 2018, after 3.4 percent in 2017, 6.8 percent in 2016 and 9.3 percent in 2015.

Around 13.8 million Europeans are employed in the auto industry, just over six percent of the EU’s total employment.

Germany is the EU member with the most direct car manufacturing jobs, followed by France, Poland, Britain and Romania.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.