By Alessandro Parodi and Greta Rosen Fondahn
(Reuters) - New car sales in the European Union declined by 3.3% in December, dragged down by slowing demand in Germany, data showed on Thursday, in the first decrease in 16 months.
The year-on-year drop can also be attributed to a comparatively strong performance of the market in December 2022, the European Automobile Manufacturers Association (ACEA) said.
In the whole of 2023, new car registrations rose 13.9%, to 10.5 million vehicles, with double-digit growth in Italy (+18.9%), Spain (+16.7%) and France (+16.1%) from a year before.
In Germany, total registrations declined by 23% in December and increased only by 7.3% during the year, the ACEA said. December registrations of fully electric cars in the country, the biggest electric vehicle (EV) market in Europe, dropped 47.6% while petrol gained 16.1%.
Electrified vehicles - either fully electric models, plug-in hybrids or full hybrids - sold in the union accounted for 48.1% of all new passenger car registrations in 2023, up from 44.2% in the previous year.
Registrations of fully electric cars fell by 16.9% in December from a year earlier, also dragged down by poor demand in Germany, but rose by 37% in total during 2023.
Electric car company Tesla recorded a 6.9% drop in December sales. Elon Musk's brand slashed prices of its Model Y cars across Europe and in China over the past weeks, amid a difficult EV market.
Tesla, Volkswagen (ETR:VOWG_p) and Mercedes Benz had said in October that high interest rates and a subdued market were discouraging EV purchases.
However, dealers in Germany and Italy and research by four global data analysis firms said that there is more behind the slower uptake than economic uncertainty, adding that consumers are unconvinced EVs meet their safety, range and price needs.
Total registrations at Volkswagen rose by 1.1% in December, while they were down 19.2% and 4.5% for Stellantis and Renault (EPA:RENA) respectively.
The number of new vehicles registered in December in the EU, Britain and the European Free Trade Association (EFTA) fell by 3.8% to 1.05 million vehicles, according to the ACEA.