Jato Dynamics has released figures showing that the European car industry has continued to grow in January 2017 – with new car registrations for the month totalling 1.2 million units, a 9.4% increase compared to January 2016. This is the second highest result for January in a decade, with the automotive market benefiting from an increased number of promotions and incentives across the 29 markets analysed.
All of Europe’s largest five markets posted an increase in registrations, Jato reports, with Germany experiencing the highest increase of 10.5%. This can be attributed to improved economic conditions and consumer sentiment, combined with lowered interest rates. France came in second, posting a healthy increase of 10.4%. This is due to there being two more working days in the month, increased sales to rental companies, and brands registering stock vehicles in January, in order to sell them later in the year – a common practice used to achieve objectives and take advantage of bonus season.
Spain, Italy and the UK posted increases of 8.4%, 10.1% and 2.9% respectively. The strong performance in the UK, the analyst believes, may be due to consumers rushing to make purchases before the Brexit process gets underway, amidst claims that prices will rise due to the sinking pound. The UK’s performance is particularly notable ahead of the introduction of the new VED (Vehicle Exise Duty) car tax rules which are likely to influence the decision-making process of consumers from April onwards.
Among the 29 markets analysed, the Netherlands experienced a significant 26.6% increase in registrations. This was partially due to a shift in tax policy, with many dealers registering cars last month, to benefit from the new lower tax rate of 22% which came into effect in January 2017 (compared to the previous tax band of 25%).