WLTP will cut market growth to 2.4%

From September, WLTP will cause car sales across Europe to dip. Poland will overtake Belgium to become Europe’s 5th-largest car market. And buyers of used cars are resisting the demonization of diesel. Those are just some conclusions from ExpertEye’s half-year report.

Since 2002, ExpertEye has provided data-driven advice to OEMs, lessors and fleet operators across Europe. Its recently published half-year report for 2018 contains interesting insights and forecasts, as well as a closer look at six of Europe’s major car markets. 

Some interesting highlights from the report:

• Mid-year sales are up 2.8% across Europe (EU28+EFTA3), but down in the UK and Ireland for four out of the six months. Prediction: an increase in tactical registrations in July and August, ahead of the introduction of WLTP in September, after which sales will fall back. Growth for 2018 will be 2.4%, and 2% for 2019. For comparison: growth for 2017 was 3.3%.

• At the end of Q1 2018, diesel had just 37.9% share of EU car sales, compared to 55.5% for Q1 2017. Diesel remains the top-selling engine only in Ireland (56.3%), Italy (55.1%) and Portugal (54%).

• The Big Five are shrinking. Germany, France, the UK, Spain and Italy still represent 71.2% of the car market in Europe (EU28+EFTA3), but that’s down 1.1 percentage point since last year.  Prediction: Poland looks set to overtake Belgium as Europe’s sixth-largest market by early 2020. Western used-car exporters are already looking at other Eastern European markets to mitigate the fall in demand in Poland.

• Europe’s biggest brand also was the fastest-growing one: Volkswagen grew 8.9% in H1 2018 to just under 994,000 units. Only three other Top 10 brands showed positive growth: Peugeot (+8.7%), Skoda (+8.4%) and Renault (+0.5%). Fiat was the biggest loser (-9%), followed by Opel/Vauxhall (-6.2%). Surprise: BMW, Audi and Mercedes-Benz have seen sales dip between -1.2% and -2%, a slump attributed to the move from NEDC to WLTP. 

• Per-capita car sales in Europe (EU28+EFTA3) are set to rise from 29.8 cars per thousand in 2017 to 30.4 in 2018 and 31 in 2019 – just 319,000 units shy of the 2007 record (31.6 cars per thousand). 

• After years of volatility, Residual Values (RVs) are again moving in line with seasonality. Spain is an exception: there, RVs keep falling – but actually, that’s also a realignment, following the deep economic crisis of the past years. Across Europe, the prices for used diesels are increasing by 1-2%, while those for used petrol cars are up by 6-7%. Prediction: the petrol-diesel divergence will continue into 2019 across most countries, but the demonization of diesel is largely being ignored. 

• Still, in order to compensate for falling demand in Western countries, exports of used diesels to Eastern Europe are up. Exports of German used diesels were up 136% to Ukraine, and 89.6% to Croatia.