“Whilst the EU car market experienced a considerable 13.9% expansion in 2023 compared to 2022, December has proven to be a particularly tough month witnessing its first month of contraction after 16 consecutive months of growth.

“Notably, the German market declined by a significant 23% in December. This is in contrast to the UK which saw a relatively strong December.” said Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), commenting on the latest European Automobile Manufacturers' Association (ACEA) figures.

New passenger car registrations fell by -3.3% in the EU car market in December according to the latest figures from ACEA. This marked the first month of contraction after 16 consecutive months of growth. The number of new cars sold across the European Union declined from 896,241 units in December 2022 to 867,052 in December 2023.

In 2023, the EU car market concluded with a 13.9% expansion compared to 2022 reaching a full-year volume of 10.5 million units. All EU car markets grew in the past year except for Hungary (-3.4%). Double-digit gains were recorded in most markets, including three of the largest in Italy (+18.9%), Spain (+16.7%), and France (+16.1%). Conversely, Germany recorded a modest 7.3% year-on-year increase influenced by its weaker December performance in which it saw a decline of 23%.

In December, there were notable increases in some markets, especially in France (+14.5%) and Spain (+10.6%).

Battery-electric cars established themselves as the third-most-popular choice for buyers in 2023 with a 14.6% market share for the full year, surpassing diesel (13.6%) but behind petrol (35.3%) and hybrid-electric (25.8%). However, in December, new battery-electric car sales declined for the first time since April 2020, dropping by 16.9% to 160,700 units.

Sue Robinson added: “It is also notable that in 2023, battery electric vehicles cemented themselves with the third largest market share in the EU car market surpassing diesel.

“Yet, sales in December witnessed a decline for the first time since April 2020. It is important that both the UK and EU governments provide clarity to consumers looking to buy electric as we enter the new year.

“2024 looks set to be a busy year within the EU with European Parliamentary elections in June and the continued deliberation of Euro 7 emissions limits. In December 2023, an agreement was reached between the EU and UK to extend the rules of origin to avoid tariffs on EVs until the end of 2026 in December.

“NFDA will continue to monitor EU issues that affect the UK auto retail sector and ensure positive progress is made to benefit the industry, consumer and environment.”