EU car sales seen slowing in 2018 with Brexit risk: ACEA

Last year, new passenger car registrations rose 3.4 percent in 2017, the fourth consecutive year of growth, reaching more than 15 million vehicles for the first time since 2007.

ACEA President Carlos Tavares, chairman of the managing board of PSA Group, blamed the industry slow down on new EU regulations on carbon dioxide (CO2) emissions and a lack of market predictability brought on by Britain's impending exit from the bloc.

"The European automobile industry is on a pathway to recovery, coming close to pre-crisis levels ... after 10 years, but in light of major regulations ahead of us, as well as the threat of Brexit this recovery is very fragile," he told a news conference.

He said the European Commission's proposals to promote low-emissions vehicles did "not sufficiently consider other alternatives" to electric cars. Further out, Europe needed to invest in infrastructure, notably charging stations, to support electric vehicles.

On Brexit, he urged negotiators to come to a swift arrangement on the new terms of Britain's trading relationship with the bloc.

"Today the automotive industry of the EU and the UK are deeply integrated. Changes for this level of integration will most likely have an adverse impact on manufacturers."

Problems could include restricted access to EU or UK markets, which could mean parts stuck in containers at ports, and the possibility of diverging regulation.

Tavares said the auto industry believed the transition period after Britain leaves the EU should be three years, longer than the 21 months until the end of 2020 that the EU has proposed.

"It is a struggle for our industry to make investment decisions when we don't know what is just around the corner," he said. "What we know today is everyone is holding on."

ACEA forecasts that German and French car sales growth will be muted and that the British car market will decline by 4-5 percent, following a 5.7 percent fall in 2017.

(Reporting by Philip Blenkinsop; Editing by Alissa de Carbonnel and David Evans)