If the European car market keeps on its
current course, sales will top 15.3 million in full year 1999. That is a level that no one
expects. For our part, we see the year finishing around the 14.7 million mark. Sales in
April, according to provisional figures released by ACEA, were 9.6% up on last year at
1,372,990 from 1,253,221. That took growth for the first four months to 7.3% at 5,471,585
from 5,098,161.

At first sight the big shock is Germany
with sales ahead by 23.7% in April at 370,000 from 299,220. There are two things that are
being said about that result. Firstly the ACEA figures are frequently inaccurate for
Germany, being based on twenty days actual sales and ten days estimates. Secondly, the
April 1998 figure had been over 14% lower than the April 1997 result, and this was
credited to the fact that the VAT rate changed in April 1998 and therefore sales had been
dragged forward into March 1998. Therefore most observers are dismissing the April surge
as misleading and are suggesting that the result should be discounted and that the market
will soon settle back and could even decline. In fact we ourselves are predicting a
decline for the full year to 3.65 million, and will stay with that figure for a while
longer. But there is one disturbing note to remark on. Far from being unnaturally low, the
299,000 sales of April 1998 were exactly average for the month, which puts the April surge
in another light.

The UK is another anomaly in that the
recent change in the practice of altering the registration plate letter to reflect the
year of first registration has meant that the current year’s results cannot be
compared with last year’s and it will be September before the effects of having two
changes a year instead of one can be measured. But what is disturbing about the UK is that
it is now being suggested by the Dealers Association that as many as 500,000 sales last
year were actually pre-registrations. In other words, the sales were made by dealers to
themselves in order to qualify for bonuses. This is destroying the second hand car market,
which means that a bit further down the line, car owners will find it difficult to offload
their newish old cars and will therefore elect to keep them for a little longer, which
means that sales of new cars will plummet.

The most notable change to the
manufacturers table involves Renault and Nissan. The effects of the recent spate of
mergers and acquisitions are graphically illustrated and underlined by the effect that
this latest conjoining has brought about, because the new pairing has suddenly taken the
number two slot in the European table whereas Renault on their own had only just managed
to climb back into sixth place, and Nissan were down in eleventh spot. Similarly the Ford
Group is now in third place, but only with the inclusion of Volvo and Mazda in their
figures. The Renault-Nissan ranking has been achieved despite a relatively poor showing
from Nissan themselves, which again only serves to highlight the potential threat that the
grouping poses once Nissan has put its house in order.

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