Car sales rose across the EU but fell in the UK

In volume terms, sales were at a record high for the EU last month

The UK car industry has been rocked by the continued uncertainty around Brexit (Reuters)

New car registrations increased by 5.2 per cent in the EU last month, totalling almost 1.6 million vehicles, according to the European Automobile Manufacturers Association (ACEA).

The group said this represented the highest June total on record, in volume terms. However, the UK posted a decline of 3.5 per cent, while Italy recorded a drop of 7.3 per cent.

In the first half of 2018, the European car market grew by 2.9 per cent, while Italy saw a decline of 1.4 per cent and the UK dropped by 6.9 per cent. In Spain, demand was up 10.1 per cent, while France and Germany recorded increases of 4.7 per cent and 2.9 per cent, respectively.

The ACEA said the “strong performance of the new EU member states is worth highlighting”, with registrations increasing by 11.4 per cent so far this year.

The UK car industry has been rocked by the continued uncertainty around Brexit, and in June the president of the CBI, Paul Drechler, said the UK’s motor industry faced “extinction” if Britain leaves the EU customs union.

Earlier this month, the Society of Motor Manufacturers and Traders (SMMT) released June data that tallies with the ACEA’s numbers, showing a 3.5 per cent drop in UK car sales during the month.

Commenting on the SMMT’s numbers, Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, said the decline was “no surprise considering the plethora of challenges being faced by sellers”.

He added: “The industry has rightly been more vocal in recent weeks, with the lack of clarity around what the playing field will look like for the motor market post-Brexit growing. Patience is running out for both manufacturers and retailers, with all parts of the industry hoping to see some material progress to allow them to plan for the future.”

Meanwhile, car maker Jaguar Land Rover recently issued a warning that it urgently needs greater certainty on Brexit if it is to continue investing in the UK motor industry.

“A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year,” said JLR chief executive Ralf Speth.

“As a result, we would have to drastically adjust our spending profile. We have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five.

"This would be in jeopardy should we be faced with the wrong outcome.”

In April, the car maker announced it was cutting 1,000 UK jobs due in part to Brexit uncertainty.