German car sales plunge as new pollution rules bite

German car sales fell sharply in January, official data showed Wednesday, hit by the coming into force of new EU pollution rules which had triggered a buying frenzy in the final months of 2019.

A total of 246,300 new cars hit the road last month, down 7.3 percent year-on-year, the KBA transport authority said, the first decline in five months.

It comes after the later part of 2019 was marked by a flurry of sales as dealerships offered discounts to push more polluting models out the door before January 1, 2020.

"After the fireworks of the fourth quarter of 2019, comes the hangover," said EY analyst Peter Fuss.

He expected the slump to drag on for months, "especially with vehicles that have a high CO2 output" such as SUVs.

Under new European Union legislation that came into force this year, automakers must reach average CO2 emissions across their new vehicle fleets of below 95 grammes per kilometre, or face harsh fines.

The average CO2 output of new cars registered in Germany in January stood at 151.5 g/km, the KBA said, some 4.5 percent lower than in December.

The slightly smaller carbon footprint comes as customers increasingly opt for greener engines.

According to the KBA, electric car sales climbed 61 percent in January, while those of plug-in hybrids soared more than 300 percent.

But with around 7,500 electrics and 8,600 plug-in hybrids sold, they account for only a fraction of the market for now, totalling 6.5 percent.

Fuss said he expected the trend to strengthen in the coming months as more electric models hit the market and climate awareness grows.

"Carmakers will be doing everything they can to significantly boost the sales of e-cars and plug-in hybrids -- or else they risk fines and harm to their reputations," he said.

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