German car sales fell sharply in June, official figures showed on Wednesday, as the sector remained grip by supply issues.

New car registrations in Europe's top economy fell by 18.1 per cent year-on-year to 224,558 units in June, the federal transport authority KBA said in a statement. New car sales had already fallen by 10.2 per cent in May and by 21.5 per cent in April.

Just over 1.2 million cars were registered in Germany in the first half of 2022, 11 per cent fewer than in the same period last year.

Car manufacturers were already battling with supply issues in 2021, which led to intermittent production stops and a slump in sales.

Those problems have persisted in recent months as lockdowns in China and the outbreak of the war in Ukraine have added to the difficulties in sourcing key components.

There was "no sign" that the market would turn around in the second half of the year, said EY analyst, Peter Fuss.

There was "no sign" the market would turn around in the second half of the year- EY analyst Peter Fuss

In addition to supply issues, soaring inflation was limiting consumers' "willingness to buy" and companies' investment appetite, he said.

The added concern caused by the possibility of a gas shortage in Germany this winter meant the conditions for a recovery in the car market were "extremely unfavourable", Fuss said.

Electric vehicle sales performed better than the overall car market, but nonetheless saw new registrations drop by 3.2 per cent year-on-year in June.

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