West European new car sales fell slightly – by 0.3% year-on-year (YoY) in May, according to data released by LMC Automotive. The annualised selling rate (SAAR) rose slightly, to 14.4m units a year last month, from 14.3m units a year in April.

The German car market rose by a sprightly 9.1% YoY in May, and the year to date (YTD) position rebounded into growth (1.7%, YoY). The SAAR for the German market rose to 3.7m units a year, demonstrating the current strength of German demand, in spite of economic sluggishness.

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UK sales were down 4.6% YoY last month, the entire market remaining stuck in the grip of Brexit-based uncertainty, LMC said.

French car registrations grew 1.2% YoY, with a selling rate of over 2.2m units a year – the highest level since the implementation of WLTP in September 2018. In Spain, however, new car sales plummeted 7.3% YoY, with the selling rate below 1.3m units a year. Registrations in the Italian market fell 1.2% YoY, but the selling rate crept up to 1.94m units a year.

LMC noted that regional YTD volumes are still down some way on last year, but that YTD 2019 compares to a particularly strong period in 2018. As we move into the latter part of this year, the YoY comparisons should look somewhat better given the weak WLTP-distorted end to 2018.

However, LMC also said that demand is not accelerating enough to put the region on track for significant growth in 2019 and warned that the risks associated with a “no deal” Brexit and trade tensions further weigh on demand. LMC forecasts that the West European car market will grow by 0.4% to 14.26m units in 2019.

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LMC analyst Jonathon Poskitt said that the resilience of the German car market is the main positive at the moment. “Germany’s buoyant car market result in May is particularly welcome after some of the more downbeat economic data that has recently emerged. It suggests the underlying demand picture is healthier than some had thought. There are still significant risks to our forecast though. Consumer and business confidence is a little fragile and potentially could turn down on adverse developments related to Brexit or ongoing trade tensions between Brussels and Washington.”