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Implications: Passenger car registrations in
the European Union have recorded a further improvement during
November, of 4.9% y/y.
Outlook: The improvement during November has
been due to several factors and despite at least one less working
day in most markets. However, IHS Markit still expects that
passenger car registrations in the EU will fall in 2019, 2020, and
2021.
Passenger car registrations in the European Union (EU) have
recorded further growth during November, according to the latest
data published by the European Automobile Manufacturers'
Association (Association des Constructeurs Européens d'Automobiles:
ACEA). Demand grew by 4.9% year on year (y/y) to 1,175,959 units.
The latest gain has meant that the decline in the year to date
(YTD) has been further reduced, ending the 11-month period down by
just 0.3% y/y at 14,123,228 units.
Passenger car registrations in the European Free Trade
Association (EFTA) - made up of Iceland, Norway, and Switzerland -
fell back last month though, down by 6% y/y to 34,901 units, as a
result of a downturn recorded in Norway. The decline this month
brings the region down by 1.5% y/y in the YTD at 418,898 units.
Again, only four of the five biggest passenger car sales-volume
markets in the EU recorded gains during November. Leading the way
was Germany with registrations of 299,127 units, up 9.7% y/y. In
addition, registrations increased by a more modest 0.7% y/y in
France, while in Italy and Spain, registrations were up by 2.2% y/y
and 2.3% y/y, respectively. The exception was the United Kingdom,
where registrations dipped by 1.3% y/y, as the market has been
beset by a range of domestic factors, not least uncertainty related
to both Brexit and the general election last week.
Much of the remaining market in the EU saw registrations grow by
varying degrees last month. The biggest improvement was in Romania,
where it jumped by 57.7% y/y due to a slump a year earlier. Other
significant gains this month have included Lithuania, Hungary and
Sweden. Sweden was hit by the hangover from the change to a new
bonus-malus tax that was introduced in July and had a massively
disruptive effect on the market as customers pulled forward
registrations before its introduction. Some of the growth recorded
this month may also be linked to further changes to the scheme,
which will increase costs to consumers when the measure of CO2
shifts from NEDC to WLTP. Ireland's registrations also did well in
November, although this month is typically a low-volume one, with
most registrations taking place around the age-related
registration-change months of January and July.
At an OEM level, one of the biggest gains was recorded by
Volkswagen (VW) Group, which increased by 13.4% y/y to 301,524
units. It was one of the worst hit by the transition from NEDC to
WLTP, as evidenced by the 38.3% y/y leap recorded by Audi to 51,421
units, while Porsche jumped 290.3% y/y to 7,455 units, as it also
benefits from the now available facelifted Macan and
latest-generation 911. VW brand registrations rose by 9.7% y/y to
145,057 units, helped by the new VW T-Cross and despite the Golf
being on the verge of replacement. SEAT has also increased by 11.1%
y/y to 38,464 units, although Skoda slipped by 1.2% y/y to 58,847
units, possibly affected by the new next generation Octavia being
just around the corner.
In second place was Groupe PSA, although its registrations fell
7.2% y/y to 171,932 units, as most of its brands declined to some
degree. Peugeot was its biggest selling brand with 73,961 units,
although this was a dip of 0.2% y/y, and it may not be helped by it
shifting two sub-compact models, the 208 and 2008, to new
generation models. Citroën also slid by 0.4% y/y to 42,865 units,
while Opel Vauxhall slumped by 21.5% y/y to 50,996 units as it
moves over to the new-generation Corsa as well as dropping some
other models in certain markets. The only gain came from DS
Automobiles, which has grown by 33.7% y/y to 4,110 units,
underpinned by the introduction of the new DS3 Crossback.
Renault Group's registrations rose 4.3% y/y to 119,998 units, it
was a mixed month for its key brands. Renault made a strong
contribution, as it increased by 12% y/y to 78,664 units. It may
have been helped by the transition to the fifth-generation Clio,
but it is also preparing to introduce the second-generation Captur.
However, Dacia was down by 7.7% y/y to 40,819 units.
Elsewhere, it was a mixed bag of performances last month.
Hyundai Group's registrations increased by 7.6% y/y to 80,674
units, as both brands made a positive contribution, while Toyota
Group improved 6.9% y/y to 59,191 units, as new models helped to
lift sales of both the Toyota and Lexus brands. Ford was up by 3.8%
y/y to 72,717 units. However, Fiat Chrysler Automobiles (FCA) fell
by 1.4 y/y to 66,334 as Jeep slumped, while Nissan's sales dipped
by 1.2% y/y to 25,392 units, as the second-generation Juke only
started reaching dealers in December.
As for the premium OEMs, Daimler had a stronger month, with its
sales growing by 7.2% y/y to 85,921 units in November, as a small
gain by the Mercedes-Benz brand was bolstered by a 60.7% y/y jump
by Smart as its ICE models are registered before it becomes an
electric-only brand. BMW Group's registrations increased 0.3% y/y
to 82,355 units, as Mini proved to be a drag on its performance. It
was also not a great month for Jaguar Land Rover (JLR), which was
down 15% y/y to 16,429 units. However, Volvo Cars' registrations
increased 2.7% y/y to 26,962 units.
Outlook and implications
The gain in passenger car registrations in the EU last month
came despite there being one less workings day in most markets.
However, markets are also still experiencing some benefit from the
hangover from the transition from NEDC to WLTP on 1 September 2018
mentioned above. This came not only from pre-registering NEDC stock
before the deadline, but also some OEMs being unable to offer a
fully compliant range of vehicles until some time after the
deadline, leading to struggles for some OEMs to the end of last
year and beyond.
The November figures were also affected by OEMs pushing new
models, which will be more positive contributors to fleet 2020/21
emissions targets. However, OEMs are also pre-registering some
vehicles that will hinder meeting this target which are currently
in their inventory. This could also affect December, alongside
customers pulling forward purchases in some markets to avoid
stiffer taxes on high emission vehicles, with France and Sweden
being two where this will happen.
Looking forward to December, while a low base of comparison
should have a positive impact on registrations along with some pull
forward, IHS Markit does not expect that this to bring the market
as a whole back into positive growth territory. Indeed, we
currently see registrations reaching around 15.21 million units by
the end of the year.
Looking beyond the end of 2019, a further decline is expected
during 2020 and 2021, before a recovery starts in 2022. There also
remains the ongoing uncertainty over Brexit. While this will be
addressed partly by the outcome of the UK general election during
December 2019, which will almost certainly see the Withdrawal
Agreement approved before the current Brexit deadline of 31 January
2020, it also opens up a new level of uncertainty given that it
will lead in to trade negotiations with the rest of the EU, with
the strategy seemingly being that this should be completed by the
end of 2020.
Posted 17 December 2019 by Ian Fletcher, Principal Analyst - AutoIntelligence, Automotive, IHS Markit