European new car market set to surge
New research from data experts, cap hpi, suggests the European new vehicle market could surge by up to 10m cars. Analysis of the big four markets, Germany, France, Italy and Spain, for the three years before the financial crisis against registrations from 2012 onwards shows a pent-up volume of over 10 million cars.
Dylan Setterfield, international forecast manager for cap hpi, said: “European registrations are up 8% year on year in the latest figures. Although this is clearly a healthy rate of growth, it is from quite a low base. It is clear the European market is yet to return to its pre-recessionary peak, and this gives manufacturers headroom regarding volumes.”
New sales in Italy are expected to be up on 2015 by around +17%, and 2015 was up +15.5% vs. 2014. However, this still only equates to annual 2016 volume of less than 1.9 million, whereas the market was over 2.5 million in 2007. The situation is similar for Spain, which has been heavily supported by government scrappage scheme subsidies, grew by 18% in 2014, 21% 2015, set for 11% this year, but still looking at less than 1.2 million compared to pre-crisis market of over 1.6 million.
Dylan Setterfield: “Car parcs are ageing in the major markets, and there is a limit to how long purchases can be postponed. Manufacturers have resumed discounting and forced registration tactics, especially in Germany, so true growth over the past four or five years will be slightly less than the figures suggest, implying that the pent up demand could be even greater.”
The data shows scrappage schemes had a significant impact. In Germany, they saw 23% growth in 2009, with the government providing €2.5 billion incentives for scrapping cars over nine years old.
However, the bulk of the additional volume was in smaller cars, with the average list prices of cars registered decreased by -11% as the mix changed. The German market has now recovered to the extent that cap hpi is expecting more than 3.36 million units in 2016 – back above the level seen in 2007.
Analysis has also shown a clear trend away from diesel in some cases. This is most clearly seen in France, which historically had by far the highest proportion of diesel cars. Diesel volumes peaked at 77% in 2008 and are expected to be around 52% in 2016. The decrease in Spain is smaller, down to 57% from a peak of 71%, and is stable around 55% in Italy. Despite these decreases, diesel remains the dominant fuel in most of the major European markets and is expected to remain the dominant fuel type in most markets going forward.
Copyright picture: cap hpi
