Although 2024 finished on a positive note, with the PV (passenger vehicle) selling rate for Western Europe improving to over 13 million units/year in December, the opening month of 2025 has started on a somewhat more modest footing. The selling rate for January 2025 is estimated to be 11.6 million units/year, and the latest result puts the market around the same level as the annual results in the last couple of years. In volumes terms, the year-on-year (YoY) performance for last month stood at -2%.
The environment for selling new cars in Western Europe appears to be getting more challenging. With US President Donald Trump taking a combative approach to international trade relations, which could well see some ratcheting up of tariffs between the EU and US, this will only drag on the region’s economic activity. Monetary easing should provide some support to the economy, and vehicle purchases, but we have trimmed the outlook for the PV market in the face of stronger headwinds.
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Commentary
The latest PV selling rate for Western Europe stood at 11.6 million units/year, in line with annual activity in the previous two years. The January 2025 result did follow a strong finish to 2024, but even taken together, these results remain in the shadow of pre-pandemic levels.
Pricing remains high in Europe, and with OEMs struggling in the face of a price war in China, and likely increased price pressures in the US from new tariffs, carmakers will do their best to retain high pricing in Europe going forward. That said, there are some positive factors when considering affordability. The ongoing reduction in interest rates is certainly helpful for vehicle financing; meanwhile, more affordable vehicles are being ramped up this year. However, these factors will not drastically change the high pricing environment.
The outlook for 2025 is now more subdued because of the growing concerns over international trade and the strength of the overall economy. Among key global markets, Western Europe looks set to remain the biggest laggard by far in terms of recovery versus pre-pandemic.
Looking at the key market results last month, there are limited positives to be drawn. Spain stands apart as being the only market out of the region’s big five to have seen a positive YoY result. In selling rate terms, Germany’s January figure was just under 3 million units/year, which compares well to the annual result of last year – the same is true of the UK market.
One market that really stands out as struggling is France, in YoY terms volumes were down 6%, while the selling rate was under 1.6 million units/year – there was only one selling rate in the previous 12 months that was lower. Caution among consumers regarding buying a new vehicle will, no doubt, only be heightened by political instability, and concerns over the labour market and economy more broadly. This January result reaffirms our view that France PV sales in 2025 will fall short of last year.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
