West
European car demand in May was intermediate between the two very poor months at
the start of 2001, and the two much better months that followed. The seasonally
adjusted selling rate came in at 14.6 mn (see Table at foot of this note), the
same as the average for the year to date. There has been a slight recovery in
German demand from the very depressed levels of the recent past; but this has
been offset by weaker results in a number of smaller countries, and a Spanish
selling rate which failed to match last month’s exceptionally strong figure.


At the same time, indications from order intake data provide a warning that
the improvement in Germany may not last; though they continue to provide encouraging
indications for Italy and for France. When light commercial vehicles are included,
we estimate the selling rate for all light vehicles (less than 6 tonnes gvw)
to have been 16.3 mn units in Western Europe, with a rate of decline slightly
higher than for cars alone. Looking beyond Western Europe to include in addition
the countries that will eventually accede to the EU, the decline has been substantially
steeper, because of a collapse in Turkish sales and a steep decline in Poland.
We estimate the year-on-year decline on this basis at 5.5% for the year to date.


There was no difference in the number of weekdays between this year and last,
but, exceptionally, Ascension Day fell in June last year. There was therefore
one less working day during May this year than last year in those countries
which celebrate a public holiday on that day – that is, all countries in Western
Europe except Ireland, Italy, Spain, Portugal and the UK.


The chart below shows total West European sales. The squares represent the
total number of cars sold in a year, while the hollow dots represent the selling
rate in individual months, and the continuous line represents a moving average
of these. We indicate the latest two months. The most recent numbers underlying
this chart are appended in a Table at the end of this note.









Final data from the Kraftfahrt Bundesamt show German sales of 295,013 units
in April, and our estimate of the May outcome is 322,500 units. Both the April
and May numbers represent substantial improvements on the selling rate in the
opening months of the year. In the first quarter, the selling rate averaged
just 3.2 mn units/year, while April produced a selling rate of 3.4, and May
3.55. (In terms of the year-on-year comparisons, April showed an increase of
7% and May a decline of 8%, but as always, this tells us as much about the pattern
of sales last year as about this year). On the face of it, these increases in
the selling rate seem to represent the beginnings of a return to normal after
the very poor first quarter results. However, it would still be premature to
reach this conclusion. Incoming order data remain even weaker than in the recent
past, and this brings the threat of more unpleasant surprises in the following
months’ registrations data. Our website carries a freely downloadable pdf file
with our reflections on the downturn in German sales during last year and this
year.











“The French
data produced another pleasant surprise.”




The French data produced another pleasant surprise. It came in the wake of
some rather discouraging macro-economic data, showing no further fall in unemployment
in the latest reported month, and very disappointing results from INSEE’s surveys
of both producer and consumer confidence. It therefore came as something of
a relief to note that the 209,341 car sales in May corresponds to a selling
rate of over 2.25 mn units/year. Total sales in the first five months of the
year are showing a rise of 4.2%, and the crude increase for May was 3.8%. So
far, there is no reflection of the poor economic news in the data on incoming
orders, any more than in the registrations data. The order intake in May was
a little lower than last year, but this merely offset a slight rise in April.
The order backlog looks healthy enough – not surprisingly, given the recent
launch of such an important new model as the Peugeot 307.


The UK selling rate in May was identical to that in April, at 2.3 mn units/year,
but a little below the average for the year to date, which had been swelled
by the exceptionally strong March result. The pattern of large rises in private
sales more than offsetting declines in fleet sales has continued. However, the
year-on-year rise in private sales was substantially lower in May, at 12% compared
with 19% in the four previous months, and the decline in business and fleet
sales was also smaller, at 5% in May compared to 9% in the four previous months.
Despite sluggish economic growth and a continuing competitiveness problem affecting
manufacturing industry, consumer confidence has been relatively well maintained,
though it has been drifting slightly downwards since reaching its recent peak
in March.


ANFIA’s press release on the Italian market has a very upbeat tone, but we
found the provisional May figure of 234,500 slightly disappointing. UNRAE’s
press release points out that the election may have disrupted the normal flow
of sales, and in this light the result is certainly no cause for alarm. It translates
into a SAAR of 2.2 mn units/year, which is considerably below the results for
the earlier months of the year. Total sales during the first five months of
the year are reported by ANFIA as being down by 1.7%. We estimate a slightly
smaller decline of 0.8% (we have a different method of estimating the future
revisions that will be made by the Motorizzazione, which continues to revise
monthly registrations numbers – normally upwards – in its database for up to
a year). Even if May was a little disappointing, the average selling rate of
the first five months remains exactly in line with last year’s total sales of
2.4 mn units. In addition, the inflow of new orders in May remained strong.
The backlog of unfilled orders is now higher than it was a year ago, suggesting
that the selling rate will be stable in the immediate future. In brief, the
Italian market remains one of the strong points in the West European scene.

UNRAE comments that June sales will “certainly” be higher than last June’s.
We agree with their thinking (though we are always a little nervous about using
the word “certainly” in the context of statements about the future).











The UK selling rate in May was
identical to that in April




Spanish sales of cars and off-road vehicles totalled 142,782 units in May,
a rise of 5.2% compared to last May. Total sales in the first five months are
down by just 0.3%. The May result was perhaps not quite as good as it looks
at first glance, even though, as the ANFAC press release points out, it is a
record for the month of May. It translates into a selling rate of just 1.4 mn
units/year, below the average for the first five months of 1.5 mn units/year,
and even further below the excellent April selling rate. On the positive side,
it was once again private buyers, rather than rental companies, that contributed
most of the increase. A tentative conclusion from the May figure could be that
the impetus from the changes to the incentive scheme, which boosted demand from
the start of this year, is now beginning to fade a little. The selling rate
in May has more in common with what we were seeing in the closing months of
last year than with the strong selling rates of the previous months.


Among the smaller countries, Sweden continues to post large declines on a year-on-year
comparison – the May result was down 22.5% on this measure. However, demand
now appears to have stabilised: in terms of the SAAR, the May result represents
a continuation of the rate of approximately 250,000 units/year that we have
seen each month this year. The same applies to Norway, the Netherlands and Finland:
a significant decline on the year-on-year comparison but stability of the selling
rate compared with the immediately foregoing months. In Belgium, the May result
was down 9.9% year-on-year, but continued the steady improvement in the monthly
selling rates from a low point in January.























































































































































































































































































\sgf
Sales
(units)


Selling
rate (Units/year)

\sgb
May
2001


May
2000


Percent
change


Jan-May
2001


Jan-May
2000


Percent
change


May
2001


Jan-May
2001


Year
2000


Percent
change

WESTERN
EUROPE

1,408,049


1,451,436


-3.0%


6,799,285


7,033,272


-3.3%


14,641,008


14,645,807


14,941,464


-2.0%

AUSTRIA
30,993


32,672


-5.1%


143,873


150,925



-4.7%


301,882


293,613


309,427


-5.1%

BELGIUM
45,980


51,029


-9.9%


243,690


281,041


-13.3%


524,428


472,645


515,204


-8.3%

DENMARK
10,811


11,566


-6.5%


41,736


53,314


-21.7%


94,291


89,877


113,179


-20.6%

FINLAND
11,415


15,008


-23.9%


51,686


68,266


-24.3%


110,384


105,559


134,660


-21.6%

FRANCE
203,941


196,549


3.8%


983,563


944,004


4.2%


2,269,952


2,199,000


2,134,120


3.0%

GERMANY
322,500


351,647


-8.3%


1,451,929


1,520,761


-4.5%


3,566,481


3,303,761


3,378,343


-2.2%

GREECE
28,780


27,989


2.8%


131,317


139,506


-5.9%


284,399


274,122


290,222


-5.5%

IRELAND
21,709


27,041


-19.7%


118,231


156,918


-24.7%


180,356


184,172


231,010


-20.3%

ITALY
234,500


237,170


-1.1%


1,208,042


1,218,176


-0.8%


2,173,959


2,441,429


2,429,070


0.5%

LUXEMBOURG
4,140


4,430


-6.5%


21,282


21,861


-2.6%


40,981


40,413


41,449


-2.5%

NETHERLANDS
51,300


58,123


-11.7%


263,546


322,379


-18.2%


493,814


497,564


597,628


-16.7%

NORWAY
8,671


9,871


-12.2%


38,634


44,265


-12.7%


88,645


91,271


97,376


-6.3%

PORTUGAL
27,796


25,697


8.2%


115,700


132,118


-12.4%


281,311


254,184


289,941


-12.3%

SPAIN
142,782


135,708


5.2%


654,002


656,163


-0.3%


1,371,249


1,497,822


1,472,146


1.7%

SWEDEN
25,081


32,354


-22.5%


106,203


123,528


-14.0%


250,509


249,679


290,529


-14.1%

SWITZERLAND
34,030


33,469


1.7%


141,152


142,955


-1.3%


312,993


310,513


314,482


-1.3%

UK
203,619


201,113


1.2%


1,084,698


1,057,092


2.6%


2,295,376


2,340,182


2,302,678


1.6%

Notes: Austria,
Denmark, Ireland, Luxembourg, Switzerland: latest month estimated by LMC
Italy:
latest month provisional estimate by Motorizzazione, previous months based
on estimate of eventual revisions to Motorizzazione data
Netherlands,
Germany: provisional estimate based on data excluding the final days of
the latest month
Spain
and Portugal: figures include sports utilities, which are reported separately
from cars
UK:
includes estimates for non-dealer sales
The
percent change in the final column compares the average selling rate in
the year-to-date with the last full year
The
average of the seasonally adjusted selling rate for an entire year is by
definition the total volume of sales in the year.












To view related research reports, please follow the links
below:-


Automotive
b2b – Strategic threats and opportunities in the automotive supply chain


PriceWaterhouseCoopers
Global Supplier Report


The
world’s car manufacturers: A financial and operating review