Europe car sales dip in January; Petrol models see sharp drop

New car sales in Europe declined 3.5% year-on-year to 961,382 units in January, marking the first drop since June, according to data released Tuesday by the European Automobile Manufacturers’ Association (ACEA). The fall was driven by weaker demand in key markets including Germany, France, Belgium and Poland. Norway recorded the steepest decline, with registrations down about 76% from January 2025.

Petrol car registrations fell roughly 26% compared with a year earlier, with sharper contractions in France, down 49%, and Germany, down 30%. Petrol models’ share of the market dropped from nearly one-third to just over one-fifth during the month. In contrast, electrified vehicles gained ground. Battery-electric car registrations rose about 14%, plug-in hybrids increased 32% and hybrid-electric models were up 6%. Together, they accounted for 69% of new registrations, compared with 59% in January 2025.

Among automakers, registrations for Volkswagen, BMW, Renault and Toyota declined 3.8%, 5.7%, 15% and 13.4%, respectively. BYD posted a 165% increase. Stellantis and Mercedes reported gains of 6.7% and 2.8%. Tesla’s sales fell 17% year-on-year, marking its thirteenth consecutive month of decline.

The data comes as Europe’s auto industry faces pressure from lower-cost Chinese competitors and a delayed shift toward decarbonisation. The sector is also contending with trade uncertainty after most U.S. tariffs were ruled unlawful by the Supreme Court of the United States on Friday.