European new car registrations were 10% down in July, when compared to the same month in 2021.

The figures, published by Jato Dynamics, highlight that the European new car market has contracted by 13% since the start of the year.

A total of 866,038 new car were delivered across Europe in July, leaving registrations at a similar level to those seen at the start of the coronavirus pandemic.

Felipe Munoz, global analyst at JATO Dynamics, said: “The impact of the chip shortage and current lack of consumer confidence is proving to be just as damaging to the market as the arrival of Covid-19.”

Electrified models continue to gain traction, but growth has slowed when compared with previous months. In July, these vehicles totalled 157,614 units – down by 2% due to falling demand for plug-in hybrid electric vehicles (PHEV).

Jato Dynamics data shows PHEVs posted a 22% decline during July, in response to recent announcements that these vehicles will no longer qualify for incentives in several European markets.

Munoz added: “PHEVs are losing regulatory favour and this is already impacting their position within the market. While governments are trying to steer the industry towards pure electric vehicles (BEV), hybrids still have an important role to play if we are to see widespread uptake of low emissions vehicles across Europe.”

The volume of electric increased by 20% to 90,139 units in July, due to the growing deals and models available. In Germany - the largest market for BEVs – demand increased by 13%, and by 69% in France, the second largest market. These cars accounted for 14% of total registrations in Germany, 12% in France, 11% in the UK, and 3% in both Spain and Italy.

Best-selling models

In the overall ranking by model, Volkswagen’s small SUV, the T-Roc, took pole position for the first time – the second time since October 2021 that an SUV has led the European market.

Volkswagen increased registrations of the T-Roc by 15% overall. In the UK, sales were up by 87%.

Among the top 10, the Peugeot 208 performed well and Fiat saw good results from the electrified version of the Fiat 500 with registrations up by 37% to 5,000 units, making it the best-selling pure electric car during the month.

Kia entered the top 10 with the latest version of the Sportage, while the Vauxhall Corsa continued to return a strong performance.