EU car registrations recover in May but fall in Ireland, UK

Car registrations rebounded across the European Union following a steep decline in April, recovering to close to their May 2007 levels, just before the economic crisis hit.

Registration in Britain on the other hand weakened.

The volume of car registration increased by 7.6% in May in comparison to the year-earlier month, reaching 1.39m, according to the European Automobile Manufacturers Association.

Commenting on the data, Claus Vistesen, Pantheon Macroeconomic's chief Eurozone economist said: "Growth was always going to rebound in May following the Easter-related fall in April due to fewer selling days, compared with 2016 when Easter was in March".

All the big markets performed "very well" last month with the exception of the United Kingdom, the EAMA said.

Of the EU's five largest markets, Germany and Spain performed best, posting gains of 12.9% and 11.2%, respectively.

They were followed by France and Italy, where registrations rose by 8.9% and 11.2%. In the UK on the other hand they recorded a decline of -8.5%.

Passenger car demand was also stronger year-to-date, with demand for passenger cars ahead by 5.3% to 6.72m. Here again the UK lagged behind, with a fall of 0.6%.

Acting as a backdrop, the European Commission's consumer confidence index for the UK was at -6.1 in May, its lowest level since November, as higher inflation weighed on consumer spirits.

Registrations also fell in Ireland, while the biggest increase seen in the Netherlands.

"Smoothing the data confirm that momentum in car sales has slowed in the past 12 months to about 5% year-over-year, from over 10% earlier in the business cycle."