Europe sales rose 14% in Oct. but economic turmoil threatens recovery

Auto sales in Europe rose for a third month in October as supply-chain issues eased, though there is growing concern that deteriorating economic conditions are beginning to put off buyers.

New-car registrations increased 14 percent to 910,753 vehicles last month in the EU, UK and EFTA markets, industry association ACEA said Thursday.

The industry returned to growth in August after 12 consecutive months of decline.

Volkswagen Group, the region's top-selling automaker, was the standout performer for the month, with a 40 percent jump from a year ago. No. 2 Stellantis saw sales drop by 1.8 percent while No. 3 Hyundai Group was down 4.9 percent.

• Download PDF below for sales by group and brand for October and 11 months

While automakers are having a somewhat easier time securing semiconductors and other components that have been in short supply, the region's energy crisis is driving up costs and standing in the way of a more substantial recovery.

Last month's sales compared with an abysmal performance a year ago and were well below levels a few years back.

"Even with some improvement assumed next year, the market will remain far below what was considered normal operating volume pre‐pandemic," LMC Automotive analysts wrote in a report last week.

Europe is bracing for a grim winter as double-digit inflation grips the region. Germany, the area’s biggest economy, is expected to contract while France, Italy and Spain may expand only slightly. In the UK, where car sales are on course for the worst year since 1982, inflation hit a 41-year high last month.

Manufacturers in the region are starting to see signs consumers are taking pause, with Stellantis flagging a slight pullback in purchases. BMW similarly warned the region is on the back foot, with a leveling off in demand being more pronounced in northern European countries.

High-end luxury vehicles have been relatively resilient, and automakers are still benefiting from unfilled orders accumulated during the height of their supply-chain crises.