Data released by European carmakers’ association ACEA shows that the recovery to car demand picked up during the month of March, reinforcing recent optimism over prospects for Europe’s economy.
In March 2015, demand for new passenger cars in the EU increased for the nineteenth consecutive month (+10.6%), marking the highest monthly growth since last March and totalling 1,604,107 units.
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All major markets contributed positively to the overall expansion versus last year, especially Spain (+40.5%) and Italy (+15.1%) which posted double-digit growth, followed by France (+9.3%), Germany (+9.0%) and the UK (+6.0%). that also performed better than in March 2014.
In the first quarter of 2015, new passenger car registrations increased by 8.6%, totalling 3.5m units. All major markets posted growth, contributing to the overall upturn of the EU market.
Peter Fuss, Senior automotive advisory partner at EY’s Global Automotive & Transportation Sector Center, said that a number of positives are behind the upturn that will benefit European car makers. “The European car makers gained further upward momentum in the recent months due to a combination of factors like cheap oil, weakening euro and an overall positive economic scenario,” he said. “Unemployment levels have fallen and consumer confidence levels are improving which has increased the discretionary spending levels across the eurozone.” However, Fuss also noted the continued presence of a number of risks in Europe. “Although economic indicators point in the right direction, political uncertainty – namely with respect to Russia and Greece – remains high and continues to negatively impact the growth of car sales within Europe”.
He also estimates current car production capacity utilisation in the EU at around 60%-65%, with the volume car manufacturers combating overcapacity while premium car makers are running at full steam. “Even though automakers have been taking measures such as shuffling production of models around plants and shifting production overseas to improve capacity utilisation, capacity levels are only expected to reach 75%-80% by around 2020,” he said.
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By GlobalDataThe prestige makers had another good month in March; BMW and Daimler both posted double-digit gains in the month.
See also: UK: Western Europe’s car market up a healthy 10.7% in March
