A highly unusual year for new car sales ended on a high for most manufacturers but there are now growing signs of uncertain times ahead, analysts Jato Dynamics said on Monday.

Though the Volkswagen Golf was Europe’s best-selling car with a 23.9% sales rise versus 2008, it had done so in a market artificially stimulated by unprecedented government and manufacturer incentives that had maintained demand over the past 12 months.

“The figures we’ve seen over the past year tell a story of how incentives have driven certain markets through these tough times – but this story is not necessarily set for a happy ending,” Jato Consult head David Di Girolamo said.

There was a strong finish in December for France, Great Britain, Italy and Spain, all of which recorded double digit percentage sales increases compared with the same the same period of 2008 – a period in the height of the recession, but without the support of scrappage incentives.

There was also a significant shrinking of December sales in Germany (-4.6%), the one major European new car market to have closed its scrappage incentive scheme. This continued a trend first evident in November.

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That was supported by the situation in eastern Europe, where a lack of scrappage schemes and rising VAT [sales tax] significantly restricted new car demand.

For example, Latvia and Lithuania ended 2009 down 72.9% and 66.2% respectively whilst even those more aligned to western demographics and consumer spending patterns, such as Finland, Denmark and Hungary, saw demand drop between 20% and 60%.

“The concern is that these market conditions could be reflected in western Europe in 2010,” said Di Girolamo. “For example, VAT is already rising in the UK [back on 1 January to 17.5% from a temporary 15% – ed] and the remaining national scrappage schemes are scheduled to close in the early part of this year. This makes for uncertain times in new car sales across some of the key western European markets.”

Model performance

Volkswagen’s Golf was 2009’s best-selling model across Europe beating Ford’s Fiesta by almost 100,000 units.

No other models came close to these two, although the biggest beneficiary of the year overall was Fiat, with both its Panda and Punto posting double-digit percentage sales increases versus 2008.

Brand Performance

A number of key models guided brand performance in 2009, with no surprises in the fact that the top brands were those with models popular in scrappage schemes, Jato noted.

Volkswagen and Ford topped the charts in 2009, exclusively due to the performance of the Golf and Fiesta. The two models accounted for over a third of all vehicles sold by the two brands.

The popularity of Fiat’s low-CO2 European model range helped it to post the highest sales increase for a volume brand, finishing the year 7% up compared to 2008.

National Trends

Ending 2009 strongly brought the European market to within 1% of 2008 sales, although the varying national performances were a further indicator of the effect on this performance of national scrappage incentive schemes. Only Austria, France and Germany posted an increase over 2008.

“It will be fascinating to see how this picture changes through 2010, as consumers react to the changing economic conditions. A good 2010 will depend on European markets emerging from recession quickly, so consumer spending does not fall too sharply without incentives,” Di Girolamo said.

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