Western European Passenger Car Sales Update
- West European car registrations grew by 8.0% year-on-year (YoY) in October. Much of this growth is the result of WLTP-related distortions in October 2018, which caused a low base effect. Further changes to emissions testing regulations coming in September 2019, along with a final chance to sell a small number of NEDC-tested vehicles exempt from the September 2018 deadline, also inflated August 2019 sales at the expense of those in September. October sales figures are characterized by a gradual normalisation from September’s weak results. This is most clear in the regional selling rate, which showed modest growth to 13.6 mn units/year in October, from 13.1 mn units/year in September.
- The German selling rate rose to 3.3 mn units/year in September, while the market grew by a respectable 12.7% YoY. In the UK, the selling rate of 2.1 mn units/year showed only modest growth from September’s disappointing figure of 2.0 mn units/year, while the market diminished by 6.7% YoY. In France, sales rose by a respectable 8.7% YoY in October. Italy saw a YoY increase of 6.6%, while the selling rate remained steady at 1.9 mn units/year. The Spanish market underwent 6.3% YoY growth in October, though the selling rate dropped to 1.2 mn units/year from 1.3 mn units/year the previous month.
- The final months of 2019 are expected to see further selling rate improvements, though, overall for the year, the market is unlikely to outperform 2018. Furthermore, with ongoing economic headwinds, we expect the market will not make any progress next year.
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West European car registrations rose by 8.0% YoY in October, while the selling rate increased to 13.6 mn units/year, from 13.1 mn units/year in September. The introduction of WLTP created market distortions in 2018, providing a very high base effect in August and low effects for September and October. This effect was repeated on a somewhat lesser scale with the latest stage of WLTP in September 2019, as the chart below indicates. Overall, the market in October demonstrated signs of recovery from these trends, though it will take longer to fully normalise. Many countries still show relatively weak selling rates, but to a lesser extent than for September. Barring the UK, most major Western European markets appear healthy in YoY terms.
Germany’s selling rate for October was weak by 2019 standards at 3.3 mn units/year, but this was an improvement on its September rate, which looks likely to be the year’s low point. Even with softer demand in recent months, the German market has been a standout performer this year. In the UK, sales declined 6.7% YoY last month, with October not this weak since 2011. Falling demand, driven by increased economic and political uncertainty, continues to limit growth in the UK market.
The French selling rate remained at 2.2 mn units/year last month, on par with September and the mid-year rates prior to the WLTP distortion. Italy’s selling rate picked up slightly to 1.9 mn units/year in October, with the year-to-date market now just under 1% down on 2018. Spanish sales picked up YoY, though the selling rate disappointed — despite the Spanish economy performing well compared to its neighbours, the car market has struggled this year, hindered no doubt by ongoing political uncertainty.
With a couple of months remaining, 2019 West European sales volume is set to finish with a similar result to 2018. Looking to 2020, the economic environment is expected to remain subdued and unsupportive for overall car market growth. A more turbulent trade environment, or no-deal Brexit, are among factors that could see this result worse than the current base forecast.
West European Car Sales
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