Sales of new cars in Germany were down significantly in July compared to the same month last year, official data showed on Wednesday.

A total of 236,393 new cars were registered last month in Europe’s largest car market – 25 per cent fewer than during the same month last year, the KBA transport authority said.

New registrations in July last year were particularly high due to an extra work day and the effects of a sales tax reduction, designed to counter the economic impact of the coronavirus pandemic, the VDIK car importers’ federation said in a press release. Nonetheless, the figures represent the second lowest month for new car sales in Germany since 1991, the VDIK said.

The slump is the first after four consecutive months of increasing registrations of new cars. 

“The hoped for market recovery is still far off,” said Peter Fuss, a partner at EY. “Despite the economy growing well and the fact only a few restrictions on public and economic life remain in place, the uncertainty is still large, particularly in light of the increasing case numbers and the sluggish vaccination campaign.”

The global shortage of semiconductors, which has been felt acutely by car manufacturers, is also a factor. The effects of the chip crunch could also have a “significant impact” in the second half of the year, according to Fuss.

The effects of the chip crunch could have a “significant impact” on car manufacturers in the second half of the year- EY partner Peter Fuss

The growth in the sale of electric vehicles slowed to 52 per cent in July, in comparison with almost 300 per cent in June.Electric models represented 11 per cent of all those sold, or 25,464 units in total.

Hybrid car sales increased by 33 per cent year on year, according to the KBA.