The European car market rose by 10.4% in May to 1,420,127 from 1,286,180, according to provisional figures released by Acea. That was a bigger rise than any of the most optimistic had expected, but it was somewhat misleading in that two major religious holidays and breaks take place in June this year whereas they both fell in May last year. That means that the month contained 2 extra days for both sales and production. The market after 5 months of 2000 was 2.7% up on last year at 6,940,844 from 6,757,675, and that is more than might have been expected. But there are some peculiar influences in play.

Germany is a major influence on the overall outcome for European sales, not just because it is the largest market by far but also because several neighbouring countries also closely track what is happening in Germany. The provisional ACEA figures show a 4.9% increase in May, which is against the run of things of late. It has to be pointed out that ACEA frequently gets German figures quite wrong, but that will not be known for another week or so. But what we can say is that there was a switch in demand earlier this year from new cars to used cars. But that has also happened in a couple of Central European countries, and between them, they have begun to suck the used car sector dry. That naturally swings demand back to new cars, and also stimulates the production side of the equation. But the other big factor has been the recent results for both Volkswagen and GM Opel. VW AG have just sacked Hans-Ulrich Sachs for allowing Volkswagen sales to diminish right across the board, and that serves to concentrate the minds of those who are left, so expect a big push from VW. Opel is also under pressure from GM to build up European market share, regardless of the cost, and so we can expect to see incentives galore from both giants, and this could drive the markets of Europe beyond the levels that would be deemed sensible if the peaks and troughs of demand are ever to be ironed out.

Table 1

Western Europe: car sales in May 2000 and first five months versus last year.

May
’00
May
’99
%
Ch
Jan-May
’00
Jan-May
’99
%
Ch
Austria**
31,978
30,117
+6.2
150,231
148,807
+1.0
Belgium
51,029
39,790
+28.2
281,041
244,947
+14.7
Denmark**
11,143
13,191
-15.5
52,532
65,854
-20.2

Finland
15,008
12,814
+17.1
68,266
64,355
+6.1
France
196,549
148,480
+32.4
944,014
855,648
+10.3
Germany**
350,000
333,676
+4.9
1,519,114
1,674,303
-9.3
Greece
27,989
23,176
+20.8
139,506
120,646
+15.6

Ireland**
26,931
18,654
+44.4
156,710
108,293
+44.7
Italy**
223,500
217,707
+2.7
1,206,500
1,135,052
+6.3

Luxembourg**
4,430
3,504
+26.4
21,936
20,750
+5.7

Netherlands
58,097
54,057
+7.5
322,371
317,595
+1.5
Portugal**
23,940
25,391
-5.7
120,281
127,664
-5.8
Spain**
127,890
123,534
+3.5
616,520
575,392
+7.1
Sweden
32,354
26,238
+23.3
123,528
116,814
+5.7

UK
194,113
175,898
+10.4
1,023,084
994,887
+2.8

EU
1,374,951
1,246,227
+10.3
6,745,634
6,571,007
+2.7

Iceland
1,404
1,440
-2.5
7,001
6,654
+5.2

Norway
9,871
8,095
+21.9
44,265
41,895
+5.7

Switzerland**
33,901
30,418
+11.5
143,944
138,119
+4.2
EFTA
45,176
39,953
+13.1
195,210
186,668
+4.6

West. Europe*
1,420,127
1,286,180
+10.4
6,940,844
6,757,675
+2.7

(*) : Western Europe includes European Union +Iceland+ Norway + Switzerland (includes Liechtenstein)

ACEA estimates(**) The figures for these countries are provisional.

If German car sales did hit 350,000 in May, that would be a quite remarkable result and totally unexpected. Sales in Germany had dipped for six of the previous seven months, and were expected to continue in that vein for a while longer yet, so a result that would be shown to be the second highest ever for the month, in those circumstances, would have to be treated with some degree of caution.

France has recorded a 32.4% leap in sales for May, to 196,549 from 148,480. True, the May 1999 result was down against the average demand for the month, and certainly we expect growth for France for the full year, but the May 2000 figure is also the second highest ever for the month and is nearly 45,000 units higher than normal sales levels for May in France. It must have been the holiday spirit in May that brought such suprising results because the UK also recorded its second highest level ever for May with sales up 13.7% to 194,113 from 175,898. So did Austria with a 6.2% rise to 31,978 from 30,117, and in the Austria result would actually have been a new record if 1996 had not seen a one-off anomaly that resulted in May sales figures hitting 51,276.

Italy and Belgium also saw sales at second highest ever levels, and Finland was at the third highest, but that was nothing compared to Spain, Eire, Sweden and Luxembourg, all of which established new all-time records for car sales in May. It will take some digging to get to the bottom of this situation, because it flies in the face of the expectations of most analysts and the big worry is that sales are being sucked so far forward that there will be an implosion that will rock the industry if the current trend continues very much longer.

Table 2

Western Europe: car sales by make in May 2000 and first five months versus last year

May
Jan
toMay
%Sh
%Sh
Units
Units
%
Ch
%Sh
%Sh
Units
Units
%
Ch
’00
’99
’00
’99
’00
’99
’00
’99
All Brands
1,420,127
1,286,180
+10.4

6,940,844
6,757,675
+2.7
VW Group
18.6
18.9
264,335
243,165
+8.7
18.2
19.0
1,261,607
1,282,246
-1.6
Audi
3.5
3.5
50,046
44,879
+11.5
3.2
3.2
224,610
218,292
+2.9
Seat
2.8
3.0
40,176
38,150
+5.3
2.8
2.6
196,783
178,614
+10.2
Skoda
1.4
1.2
20,511
15,036
+36.4
1.3
1.1
92,074
76,387
+20.5
PSA Group
12.6
11.0
179,219
141,025
+27.1
12.8
11.6
886,549
782,816
+13.3
Peugeot
7.5
6.7
105,967
86,220
+22.9
7.7
7.0
532,805
474,860
+12.2
Citroen
5.2
4.3
73,252
54,805
+33.7
5.1
4.6
353,744
307,956
+14.9
Japanese
11.0
11.3
156,438
144,945
+7.9
11.4
11.6
794,578
782,933
+1.5
Toyota
3.5
3.1
49,200
39,374
+25.0
3.6
2.9
250,935
198,887
+26.2
Nissan
2.5
2.5
35,958
31,953
+12.5
2.6
2.7
180,226
179,362
+0.5
Mazda
1.3
1.5
17,796
19,786
-10.1
1.3
1.6
92,970
107,873
-13.8
Honda
1.2
1.3
16,516
16,355
+1.0
1.3
1.4
89,063
94,317
-5.6
Mitsubishi
1.2
1.2
17,351
15,852
+9.5
1.1
1.2
79,766
84,443
-5.5
Others
1.4
1.7
19,617
21,625
-9.3
1.5
1.7
101,618
118,051
-13.9
GM Group
11.7
11.9
165,998
153,465
+8.2
11.1
11.4
769,444
772,361
-0.4
Opel/Vauxhall
11.0
11.3
156,005
144,830
+7.7
10.5
10.8
728,673
732,855
-0.6
Saab
0.6
0.6
8,835
7,515
+17.6
0.5
0.5
36,097
34,145
+5.7
Others
0.1
0.1
1,158
1,120
+3.4
0.1
0.1
4,674
5,361
-12.8
FIAT
Group
10.3
10.5
145,667
134,556
+8.3
10.8
10.4
746,218
704,627
+5.9
Fiat
7.8
8.1
111,255
104,431
+6.5
8.2
8.1
568,994
546,517
+4.1
Lancia
1.2
1.0
16,774
13,429
+24.9
1.3
1.0
90,780
69,669
+30.3
Alfa Romeo
1.2
1.3
17,212
16,416
+4.8
1.2
1.3
84,429
87,214
-3.2
Others
0.0
0.0
426
280
+52.1
0.0
0.0
2,015
1,227
+64.2
RENAULT
11.0
10.4
155,504
133,925
+16.1
10.7
10.7
742,690
725,979
+2.3
FORD
Group
10.4
11.8
147,758
151,932
-2.7
10.4
11.5
718,693
774,674
-7.2
Ford
8.5
10.1
120,256
130,159
-7.6
8.6
9.7
596,591
657,267
-9.2
Jaguar
0.2
0.3
3,239
3,216
+0.7
0.2
0.2
16,583
10,580
+56.7
Volvo
1.7
1.4
24,263
18,557
+30.7
1.5
1.6
105,519
106,827
-1.2
DaimlerChrysler
5.9

5.7
83,200
73,076
+13.9
5.5
5.4
383,613
362,581
+5.8
Mercedes
4.8
4.6
67,800
58,978
+15.0
4.4
4.5
307,689
304,787
+1.0
Smart
0.7
0.4
9,600
5,185
+85.1
0.5
0.3
37,851
18,265
+107.2
Chrysler
0.4
0.7
5,800
8,913
-34.9
0.5
0.6
38,073
39,529
-3.7
Korean
3.1
3.1
43,819
40,293
+8.8
3.5
2.9
240,727
199,277
+20.8
BMW
3.6
3.2
51,606
41,387
+24.7

3.3
3.2
226,170
214,407
+5.5
Rover
1.6
1.9
22,312
23,820
-6.3
2.1
1.9
145,578
131,229
+10.9

Volkswagen lifted sales by 5.9% in May to 153,602 from 145,100, but that was less than the average growth rate for Europe and so market share fell further, to 10.8% from 11.3%. At least the downwards slide has been halted, at least for May, and the YTD deficit has softened to 7.5% at 748,140 from 808,953. Audi had an 11.5% surge in May to 50,046 from 44,879, which has put them back in the black year to date at 224,610 from 218,292. SEAT failed to match the average growth rate, but Škoda is still powering on and altogether the VW Group enjoyed 8.7% growth in May at 264,335 from 243,165, reducing the YTD loss to 1.6% at 1,261,607 from 1,282,246 and one more month like May will see the group back into positive figures at the half-year stage.

The GM Group had slipped behind the Fiat Group up until the end of April, but an 8.2% gain in May at 165,998 from 153,465 was enough to move back above their new partners, despite Fiat Group getting an 8.3% boost to 145,667 from 134,556. GM Opel has enough going on at the moment, with the new Agila now available, and the Corsa and VX220 due in the next five months, to suggest that they will now begin to climb again. The Ford Group slid in May, against the observed trend, and that makes it look as though they will be in for a tough time until the new Mondeo becomes available later in the year.

BMW may well suffer a backlash in Britain after the unseemly way that they extricated themselves from the Rover debacle, but they will draw consolation from the fact that they evidently did very well elsewhere because sales in May rose by 24.7% to 51,606 from 41,387. Meanwhile Rover found little sympathy and saw sales dip in May by 6.3% to 22,312 from 23,820. There is not much doubt that many believe that Rover were treated shabbily by BMW – although it has to be said that they had more than enough time to respond to what was required of them – and there are many who want to see the underdog come good, but what won’t help Rover is that many of them are standing back to see what happens, rather than helping the cause by buying Rover products.