PARIS, July 24, 2025 (BSS/AFP) - Europe's new car market saw a sharp seven-percent year-on-year drop in June, with top economies Germany, France and Italy posting especially steep declines, according to automobile manufacturers' figures published on Thursday.

The continent's car industry has laboured under an uncertain global economic outlook overshadowed by US President Donald Trump's threats of tariffs, as well as stiff competition from China, notably on the key electric vehicles market.

According to the European Automobile Manufacturers' Association (ACEA), European sales dipped two-percent in the first half of 2025, with petrol and diesel models posting sharp 21 and 28 percent declines respectively.

Hybrid models have caught up to fill in the gap, with sales rising 17 percent and the sector now representing more than a third of the market.

Fully electric vehicles, seen as essential to the world's transition to a low-carbon economy in an age of man-made climate change, likewise saw sales rise, albeit at a more modest 22 percent compared to the massive expansions of previous years.

Despite government subsidies to encourage more people to drive electric, such "EVs" only represent under 16 percent of the European market.

"We are still far from reaching mass adoption," said the ACEA, which represents the continent's 16 major car, truck, van and bus makers.

"Consumers clearly remain cautious, and more robust demand measures will remain a crucial element to get the transition up to speed," said the ACEA, which wants CO2 emission standards to be revised.

Hinting at the looming threat of US tariffs, the ACEA said: "What is very also concerning for manufacturers is the notable drop in new registrations at a time when we already face an increasingly unpredictable trade environment and other threats to competitiveness."

Jeep maker Stellantis suffered the worst June decline, with Europe's number two carmaker selling 30,000 fewer cars, or a 16 percent fall. Its Fiat and Citroen lines were worst-affected, with both brands in the middle of a shake-up to their models on offer.

Top producer Volkswagen saw an around average eight-percent decline, while podium-placed Renault saw just a half-percent drop.

Both Japan's Toyota and South Korea's Hyundai-Kia also saw around 10,000 fewer sales in June, with their market shares declining in the first half of the year.