Figures released by European carmakers’ association ACEA show that the EU’s car market experienced a 13.3% jump in the month of December to end the year 1.7% below 2012’s annual total. However, the outlook for Europe’s car market remains weak, with 2-3% growth forecast for 2014.
Analysts cautioned that December’s very positive headline market growth figure reflected a number of artificial factors and that an upturn to underlying demand would be gradual through 2014.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
LMC Automotive analyst Jonathon Poskitt told just-auto that the December result needs to be seen in context. “The big year-on-year percentage gain reflects the impact of some tax changes, particularly in the Netherlands,” he said. “And there is also the effect of the scrappage incentive in Spain, as well as some evidence that manufacturers across the continent were involved in heavy discounting activity.”
Poskitt believes that the underlying trend in Europe is a positive one. “In the second half of 2013 we saw the European car market bottom and then pick up, slightly,” he says. “That augurs well for 2014, but we are still looking at a very gradual recovery with the West European car market growing by 2-3%. The outlook for the European economy remains fairly weak and that means recovery to car demand will take time.”
IHS Automotive analyst Carlos Da Silva also highlighted manufacturer activity in December. “The growth in the UK market was also due to very good bargaining conditions,” he said. “The same roughly applies to Spain from the second part of the year when the scrapping incentive really kicked off. We also have reasons to think that the double-digit growth of December was partially driven by many manufacturers resorting again to tactical sales [eg dealer registrations] to hit their internal volume targets.”
The ACEA data shows that Europe’s new car registrations declined for the sixth consecutive year in 2013 and that the market was at its lowest since 1995.
New car sales in the EU dropped 1.7% to 11.85m units in 2013.
In December, most EU markets posted growth, as did all the major ones, from +1.4% in Italy, to +5.4% in Germany, +9.4% in France, +18.2% in Spain and +23.8% in the UK.
However, for the year as a whole, the UK was the only ‘big four’ car market to show growth (+10.8%). Germany (-4.2%), France (-5.7%) and Italy (-7.1%) all saw car market falls in 2013.
Carlos Da Silva sees 2014 as a tipping point, when the European market starts to grow again. However, he warns that the economic crisis will be felt for some time. “We do not think that the EU market will return to its 2007 peak…ever,” he says.
“Actually, we consider that the EU has already entered a phase of structural changes that the crisis has somewhat favoured, maybe accelerated. We are referring to evolutions such as demographics, growing green consciousness, changes in the social acceptance of cars for instance. These, combined with many more constrained buyers due to austerity suggest very limited growth in such a mature car market as the EU’s.”
See also: UK: Western Europe car sales up 11.8% in December
