Western European Passenger Car Sales Update
- West European car registrations grew by 20.6% year-on-year (YoY) in December. This is a particularly strong headline result, showing further recovery from a September low, and buoyed by substantial YoY growth in all five major economies. A weak December 2018 explains part of the YoY result, though the relatively strong selling rate activity suggests some pull-forward in sales prior to the 2020 CO2 targets. In full-year terms, registrations rose by a more modest 0.7% to 14.3 mn units, kept from negative growth territory by December’s strong result.
- The German selling rate rose to 4.0 mn units/year in December, while YoY sales growth remained strong at 19.5%. UK sales were up 3.4% YoY in December, with Brexit-based uncertainty diminished by the election result but not fully addressed. In Spain, sales for December rose 6.6% YoY, with total annual sales falling by 4.8% to under 1.3 mn units/year. Italy saw annual sales of 1.9 mn units, 0.3% higher than last year, aided by YoY sales growth of 12.5% for December. French registrations saw 27.7% YoY growth in December, with the annual total climbing above 2.2 mn units.
- Regionally, full-year 2019 sales were up 0.7% from 2018, in line with our expectations in previous reports. Our 2020 forecast has been lowered due to the strength of December 2019 and associated pull-forward in registrations, though we continue to forecast 14.0 mn units for the year. All meaningful economic challenges in 2019 can be expected to persist into 2020, particularly in light of the external trade environment and Brexit uncertainty.
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West European car registrations were up 20.6% YoY in December, while the selling rate rose to 15.3 mn units/year, from 14.0 mn units/year in November. The total sales figures for the year showed modest growth of 0.7%. These figures are best explained by three factors: the diminishing impact of WLTP implementations in 2019, which have now largely faded, the low base effect created by the more severe effects of WLTP implementation in 2018, and a pull-forward effect as cars are registered early in order to avoid CO2 emissions targets in 2020.
German sales in December showed another strong month, rising by 19.5% YoY. With total sales figures for the year rising to 3.6 mn units, Germany continues to perform remarkably well within the context of the wider economy, but we do not expect the market strength to persist.
UK sales showed YoY improvement in December, increasing by 3.4% in comparison to last year. However, the overall yearly picture is bleak: at 2.3 mn units, yearly sales are not only down 2.4% from 2018, but also the lowest they have been since 2013, thanks to Brexit uncertainty and confusion over how diesel cars will be affected by proposed low-emissions zones. Though the results of the election in December were expected to alleviate some of this uncertainty, decisions taken by the new government have ensured that a disruptive exit from the EU is still possible.
The French selling rate jumped to 2.4 mn units/year, with a final annual tally of 2.2 mn units, a 1.9% increase on 2018. This is in part due to a very strong sales figure for December. After modest YoY sales growth in November, Italian sales grew by 12.5% in December, resulting in minimal full-year growth of 0.3%. In Spain, December’s YoY growth of 6.6% belies a much more unimpressive figure for the whole year, down 4.8% from 2018 as a result of continued political uncertainty and low consumer confidence.
West European Car Sales
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