While there is a vocal group of drivers who prefer driving stick, automatic cars appeal more to the average consumer because they are much easier to drive.
This is what made them popular in North America.
However in the 70s and 80s manual cars were actually more fuel efficient and (depending on circumstances) were often cheaper.
While Americans started buying ever larger trucks and SUVs the European market has preferred compact cars.
Europe has traditionally had much higher gas prices than in the US, which got serious due to the gas crisis in the 70s. Combined with the nature of the narrower roads, particularly in cities, made compact manual cars far more popular.
These are the same reasons that Diesel cars became popular in Europe for a time, because diesel was cheaper than gas.
Today the fuel efficiency of automatics and CVTs is much better and Europeans have mostly switched over, but so many Europeans are used to manuals that they remain popular.
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