Volkswagen Loses Market Share as European Car Sales Inch Up in August

European passenger car registrations rose strongly in August compared with August 2015, according data from the European Automobile Manufacturers Association.

The EAMA deemed August's performance "impressive" especially considering August is usually the weakest month for sales due to the summer holidays.

Under-fire Volkswagen (VLKAY) saw its overall market share drop in August to 26% from 26.5% in August 2015, prior to the diesel emission scandal breaking. VW saw registrations rise by 6.3% on the year ago during August, to 222,739 units. 

The emissions' scandal has already cost VW more than $14 billion in the U.S. and the likely actions of authorities and consumers in other jurisdictions is still uncertain.

Fiat Chrysler (FIATY)  saw registrations jump by 20.4% from 2015 levels to 47.925 units. The company also increased its market share to 5.7% in August from 5.2%.

Total registrations fell to their lowest level so far in 2016 but, at 855,466 among European Union and European Free Trade Area countries, were up by 9.5% compared to one year ago.   

Daimler (DDAIF) , and Renault  (RNSDF) also notched up double digit increases, with registrations rising by 17.2% and 14.6%, at 57,930 and 79,922 respectively.

Japanese car maker Honda  (HMC) saw registrations rise by 26.3% at 8,306 units during August, while Jaguar Land Rover saw growth of 22.4% at 8,824 units but both still account for a tiny market share with Honda accounting for just 0.9% and Jaguar Land Rover grabbing 1% of the market.  

Shares of FCA Group, Daimler, Volkswagen and Renault were all higher in early European trading on Thursday.

FCA stock was up by 0.2% at €5.74 ($6.32), and Daimler was 0.1% higher at €61.60. VW stock rose by 0.3% at €123.0 and Renault was up by 0.4% at €71.34.

Auto manufacturers have all seen their stock prices fall during 2016 as concerns have lingered for some over the likely costs of the emissions' rigging scandal. Fears over economic growth and the potential fallout from the U.K.'s Brexit vote have also dented confidence in the earnings outlook across the sector.

Auto registrations had grown strongly until the U.K.'s referendum, rising for 34 consecutive months, before posting a 1.4% contraction in July after uncertainty built in the run up to the referendum. 

There can be a lag of some months length between the date when a car is sold and the date when it rolls off the production line and is registered.

As a result, it is likely that any Brexit induced effects on sales are yet to emerge from the registrations pipeline. 

In a telling sign of what might still be to come on the continent, General Motors  (GM) cut production and staff hours at one of its plants in Germany during August given a slowdown in demand from the U.K., its largest European market for the cars produced by its Opel subsidiary.

A downturn in U.K. consumer spending would hit European car makers given that it is one of the largest and most profitable markets for car sales.

So far, an economic downturn in the U.K. appears to have been avoided, with consumer spending holding steady, lower interest rates ensuring the availability of cheap credit and the house prices remaining on a steady upward trajectory.

On Thursday morning, data showed U.K. retail sales holding on at much of July's 1.4% increase, while European economic data has also remained bright.

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