EUROPEAN car sales declined for a seventh straight month in March as several countries struggle with slowing growth, adding to challenges for an industry shouldering record spending on electric and connected cars.

Sales dropped 3.6 percent in March to 1.77 million cars in the European Union and European Free Trade Association, the European Automobile Manufacturers Association said yesterday. Italy led the declines among major markets with a drop of almost 10 percent, followed by Spain.

The downturn in the region has extended beyond turmoil that started in September with the introduction of new emission testing rules. Italy, where the economy is already contracting, may weaken further while contracting car sales in Spain are in line with forecasts for a slowdown for an economy that’s been resilient so far. Germany, the continent’s biggest economy, barely skirted a recession at the end of last year, and prospects for recovery remain dim.

For the quarter through March, sales fell 3.2 percent, the European Automobile Manufacturers Association said.

A softer market adds to headwinds for carmakers battling sliding profits that prompted BMW AG to intensify measures designed to save 12 billion euros (US$14 billion) by 2022. Rival luxury carmaker Daimler AG is also looking for cost reductions. Pressures are set to intensify in the EU next year with tighter regulation on carbon dioxide emissions, while uptake of electric cars remains at a fraction of total deliveries.

The industry may face EU penalties of 30 billion euros (US$33.93 billion) with Volkswagen AG still working on a deficit to meet CO2 goals, Volkswagen CEO Herbert Diess said Tuesday. (SD-Agencies)