It is tempting to interpret the September car sales figures as giving one of the first insights into the extent of the blow that has been delivered to European consumer confidence following the senseless, mindless and heartless atrocities committed in the USA on the 11th. We believe that these figures provide only limited relevant evidence, and not just because only the second half of the month can have been affected. As the shift towards build-to-order grows, in Europe, even more than in the USA, registrations increasingly reflect the delivery of vehicles ordered several weeks, even months, earlier. Incoming orders are a valid leading indicator, but measures of them are not available in all countries. Registrations are increasingly a lagging indicator.

The selling rate in September was 14.9 mn units/year, after adjustment for seasonality and number of working days. This is right in line with last year’s average, and with the average for this year to date. September, like March, is a month in which the UK makes a particularly important contribution — about twice as large as in other months — to determining the outcome for Western Europe as a whole. If we concentrate on the raw figures, the comparison of this September with the previous September therefore tells us more than usual about the still robust state of UK consumer demand, and less than usual about developments in other parts of Europe. However, seasonal adjustment removes this source of bias, and gives the UK results an importance only in line with their full-year total. As the table below shows, we estimate that September sales were 2.8% higher than last September, but excluding the UK, showed a fall of 5.6% (of which about 4% can be attributed to the lower number of working days). The year-to-date total is estimated to be down by 0.8%. This 0.8% cumulative fall in West European car sales becomes a 1.1% fall in total light vehicle sales, when light commercial vehicles are included. If one considers both Western Europe and the countries of Eastern and Central Europe that have applied to join the EU (including Turkey), the cumulative change becomes a 2.2% decline for cars and a 2.8% decline for all light vehicles.

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 the table at the end of this note. Because of the exceptional weight of the UK in this month’s figures, we have inserted a row to show the totals excluding the UK.

In September, we are currently expecting German sales of 260,000 units, representing a 3.35 mn units/year selling rate. The German market, which earlier in the year was tending to surprise by its weakness, has for the last two months showed a slight improvement in the selling rate, even though the improvement in September was rather minimal. The August figure, now confirmed at 256,418 units (close to the preliminary estimate in our last report) represents a 3.6 mn units/year selling rate, which is the best since late 1999 — though August selling rates are always volatile. The September selling rate is slightly, but only slightly, better than the average for recent months. Although premium marques are continuing to sell well, the mass market models are struggling, and anecdotal evidence concerning order intakes suggests that they may struggle even harder in the next couple of months. In Germany, as in most European countries, other than the UK, the September result is closely in line with what would have been expected on the basis of recent trends. Consumer confidence, which had been taking a steep dive, actually picked up slightly in early September. It should be recalled that the consumer confidence surveys provided by the European Commission that we refer to here were all carried out before September 11th.

After exceptionally strong results in the summer, French sales were more normal, though still strong, in September. The 2% increase in cars sold (compared to last September) translates into 6% more per working day if you count Saturdays, or 7% more if you don’t. Behind the enormous uncertainties about seasonally adjusting the French data (which will be with us for a long time to come), the raw data tells us that the cumulative year-on-year increase peaked in July at 7.5%, and fell back to the current level of 5.7% in the two following months. As the Table below shows, we estimate the September selling rate at close to 2.15 mn units/year, rather below the average for the year-to-date. Consumer confidence has been continuing to fall back — the September fall, though sharp, was only a continuation of a process that has been going on for a while, and, following September 11th, further falls are likely. The CCFA comments that it does not expect “brutal” declines in car demand in the remaining months of this year. This view is supported by the fact that incoming orders in the last couple of months have been ahead of the year-earlier levels, though not as vigorous as they were earlier this year.

Italian sales are estimated by the Ministry of Transport at 163,200, down 11% on last September. The selling rate of 2.28 mn units/year was one of the lowest this year, but should be seen in the light of the strong August result, and also in the light of the imminent launch of the Fiat Stilo, which went on sale in Italy on Saturday October 6th, and which some buyers may have been awaiting. Averaging out the ups and downs of individual months, we now have a fairly consistent picture of a slightly weakening selling rate ever since February of this year. Interestingly, consumer confidence, which has been rising since the election, hit a 10-year peak in early September, surpassing for the first time the previous peak of early 1995. However, anybody tempted to read too much significance for the automotive market from this result should recall that in 1995 car sales were only 1.75 mn units — the two are not that well correlated in Italy. More telling is the fact that incoming orders for new cars in September were down by some 10% on the recent seasonally-adjusted trend, and by the same amount when compared with a year earlier. Here too, though, the fall could well have a “Stilo” component as well as a “terror” component. A 3% rise in second-hand car sales adds to the picture of a market which is still fairly solid, even if new car sales are slowly retreating.

The first month of the new registration-plates brought a truly phenomenal boost to UK new-car sales. The 443,265 sales through UK dealers represent a 25% increase compared to last September. The UK industry, which worked so hard to get rid of the previous concentration of sales in August, now finds itself, not with an even spread of sales through the year, which would be better for programming production, but with two strong peaks. Although it was private buyers who contributed the most to this result, with a rise of nearly 30%, it was also noticeable that fleet and business sales (which are still showing a cumulative decline compared to last year) were exceptionally strong, rising by 21%. How much of this strong result was due to the introduction of the new registration system is hard to quantify, but the larger the number of purchases that were postponed from the previous months, the more impressed one must be by the strength of sales in those earlier months. Consumer confidence continued to rise, according to the measure taken in early September. As far as broader economic significance is concerned, these figures suggest that the UK is enjoying a rather rare combination of a rampant spending spree with rapidly falling interest rates (which were cut by 25 basis points during the month, and a further 25 in early October).

Spanish sales came in, as expected, at a selling rate of 1.5 mn units/year, slightly (1.7%) down on the year-earlier figure, and significantly lower than the selling rate in the preceding months. Much of the decline was due to a weakness in sales to rental companies– a phenomenon which we expect to be widespread throughout Europe in the immediately coming months, and is one of the most immediate after-effects of the terrorist attacks. Demand from other sources — private buyers and non-rental companies — remained relatively strong, and is estimated to have been up by about 1% on the year-earlier comparison.
Among the smaller countries, there were few surprises. In Belgium, Finland, Norway, Portugal and Sweden, the results were very close to the recent trend in the selling rate, even though the year-on-year changes were negative. Ireland’s large decline showed a further deterioration in a downward trend that had been apparent for some time. Dutch and Greek sales surprised slightly on the up-side.

  Sales (units)           Selling rate (Units/year)      
  Sep Sep Percent Jan-Sep Jan-Sep Percent Sep Jan-Sep Year Percent
  2001 2000 change 2001 2000 change 2001 2001 2000 change
WESTERN EUROPE 1,316,152 1,281,077 2.7% 11,708,718 11,806,455 -0.8% 14,898,028 14,944,860 14,940,219 0.0%
Excluding UK 863,887 915,583 -5.6% 9,692,024 9,942,693 -2.5% 12,189,557 12,498,165 12,637,541 -1.1%
AUSTRIA 22,408 23,217 -3.5% 239,397 251,199 -4.7% 300,427 293,105 309,427 -5.3%
BELGIUM 30,593 31,519 -2.9% 387,711 422,875 -8.3% 466,661 480,083 515,204 -6.8%
DENMARK 6,572 7,867 -16.5% 73,832 88,708 -16.8% 97,089 96,328 113,179 -14.9%
FINLAND 8,198 9,663 -15.2% 88,263 110,087 -19.8% 110,761 110,142 134,660 -18.2%
FRANCE 153,044 150,191 1.9% 1,713,958 1,621,310 5.7% 2,142,569 2,264,085 2,134,120 6.1%
GERMANY 260,000 270,393 -3.8% 2,556,067 2,611,894 -2.1% 3,350,932 3,338,780 3,378,343 -1.2%
GREECE 18,331 19,846 -7.6% 228,432 235,851 -3.1% 311,367 293,950 290,222 1.3%
IRELAND 5,546 9,254 -40.1% 157,606 219,840 -28.3% 127,163 170,538 231,010 -26.2%
ITALY 163,200 183,605 -11.1% 1,907,600 1,937,055 -1.5% 2,275,971 2,403,148 2,427,825 -1.0%
LUXEMBOURG 2,325 2,610 -10.9% 34,175 33,676 1.5% 40,191 42,856 41,449 3.4%
NETHERLANDS 40,607 43,330 -6.3% 439,465 497,294 -11.6% 560,122 536,978 597,628 -10.1%
NORWAY 7,058 7,161 -1.4% 70,261 76,351 -8.0% 94,266 91,820 97,376 -5.7%
PORTUGAL 15,460 16,953 -8.8% 201,992 223,545 -9.6% 260,750 262,878 289,941 -9.3%
SPAIN 90,291 91,836 -1.7% 1,167,274 1,151,792 1.3% 1,505,711 1,547,782 1,472,146 5.1%
SWEDEN 18,928 24,338 -22.2% 182,276 215,260 -15.3% 244,858 251,610 290,529 -13.4%
SWITZERLAND 21,326 23,800 -10.4% 243,715 245,956 -0.9% 300,718 314,084 314,482 -0.1%
UK 452,265 365,494 23.7% 2,016,694 1,863,762 8.2% 2,708,471 2,446,694 2,302,678 6.3%

Notes: Austria, Denmark, Luxembourg, and Switzerland estimates.
Italy: latest month provisional estimate by Motorizzazione, previous months based on estimate of eventual revisions to Motorizzazione data.
Germany estimated from data excluding final days of 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 regional report: Western Europe

The automotive industry of central and eastern Europe

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