Today, industry associations representing the vehicle markets of Germany, the UK and Russia all reported May light vehicle sales.

Again, all painted a bleak picture – albeit not as bad as GlobalData’s base assumption for the month. In the biggest of those markets, Germany, the result was marginally worse than GlobalData’s modelling. Light vehicle sales for the month totalled 183,489 versus GlobalData’s forecast of 184,699 – both representing a 49% year-on-year drop in sales.

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The markets in Russia and the UK both significantly outperformed our expectations, but still posted dizzying falls.

Russia’s result came in at just under 68,000 light vehicles against our assumption of 17,203, with our assumption predicated by Russia’s seeming shift to become the European market most affected by Covid-19. Nevertheless, Russia’s much improved performance was still some 51% off May 2019 performance.

In the UK, light vehicle sales totalled 27,788, 87% down on May 2019, against our forecast for just over 8,500 units. According to the SMMT the UK market was rescued to a degree by the start of ‘click and collect’ services in the middle of May.

Our forecast for Europe, and other major regions, calls for a bounce back to begin gradually from April’s nadir. May’s results thus far show that April was indeed the low-point for many markets – with only Brazil of the major markets currently expected to post a May result worse than that of April.

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The recovery is predicated on both an easing of Covid-19 induced restrictions, OEM incentive programs and concerted government action to aid the industry. Already, France has announced a substantive program and the Netherlands has announced incentives for private buyers of EVs will be available from July. Joining those markets is Germany – which as part of a €130 billion economy-wide stimulus package, has announced a doubling in the EV incentive from €3,000 to €6,000. Also beneficial to the vehicle market in Germany will be the reduction in VAT to 16% from 19% which is effective July 1 – December 31.

As ever, the effect of such measures will be to pull forward demand with the probability, that once the market stands on its own two feet in 2021, that volumes in 2021 will probably be in line with 2020 totals as fundamental economic weakness is unmasked.