In February, the PV (passenger vehicle or car) selling rate for Western Europe improved to 12.6 million units/year, from 11.6 million units/year in January. Despite the growth in selling rate, sales volumes were down 2.6% from last February.
The automotive industry continues to face challenges due to a rapidly evolving geopolitical landscape. US President Donald Trump’s expected imposition of higher tariffs on European imports will have a direct impact on OEM strategy, as well as act as a drag on the health of the European economy and consumer affordability. In a region in which sales and overall economic growth remains stagnant, the EU commission is easing rules on emissions standards that had the potential to drag further on sales in 2025. Nonetheless, the market growth outlook remains limited.
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The PV selling rate for Western Europe stood at 12.6 mn units/year, up on both January 2025 and February 2024. However, overall sales volumes were down 2.6% YoY — sales volumes fell across most markets. The broader Western European economy has seen stagnant growth which has dampened vehicle demand over the last year. In addition to this, a wide array of geopolitical headwinds, and ongoing high vehicle pricing, are hindering sales. While monetary easing should be supportive, the speed of rates cuts is increasingly unclear in the presence of tariffs and their inflationary effects.
The European Commission’s recent proposal to give car manufacturers more time to meet Europe’s CO2 emission standards, as well as a possible EU subsidy program, could help sales growth. Additionally, we should see increasing BEV adoption with the release of cheaper models going forward. However, it is unlikely that these features will create drastic change in the short term. Uncertainty will continue to drive the direction of the market in 2025 and Western Europe continues to be the largest laggard by far in terms of recovery versus pre-pandemic.
Sales volumes were mostly down across all key markets in Western Europe, except for Spain, which continues to see positive growth heading into the new year, a reflection of solid economic growth — a booming tourism sector and robust labour market that is fuelling economic expansion. Sales were up 11% YoY and the selling rate stood at over one million units.
Germany and Italy both saw volumes decline by over 6% YoY. Additionally, the selling rate in Germany fell 2.4% MoM to 2.9 million units/year. Stagnant economic growth and an evolving geopolitical landscape are having real effects on sales growth in the market. France and the UK saw more modest declines, as sales fell 0.7% and 1% YoY respectively.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
