Car sales in Western Europe fell by 3.6% year-on-year in April, according to JD Power Automotive Forecasting.
JD Power said that the disappointing result reflected the fact that the year-on-year comparison is with a period in 2010 that still had a number of important government scrappage schemes running.
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However, while the markets of Italy, Spain and the UK continued to struggle, as expected, France was also down and, more worryingly, ‘Germany’s growth is quickly losing momentum’.
April car sales in Germany were up by just 2.6% on last year. After a strong start to the year, buoyed by a booming economy the year-to-date market to the end of April was up by 10.7% on the same period of last year.
Hopes have been high that the strong German economy will underpin growth of the German car market this year. While consumer and business confidence has been very positive and unemployment is at its lowest level since 1992, April’s sluggish car market may concern industry analysts.
April also saw the selling rate in France ease back after a strong start to the year — the first quarter benefiting from a spillover of new registrations relating to the ending of the 2010 scrappage scheme. The French market was off to a flying start this year with the selling rate averaging nearly 2.6 m units/year in the first quarter. The strength was due to the ending of its government scrappage scheme in December 2010 and the subsequent spillover of registrations related to it in the opening months of 2011. However, with this market boost now at an end, April has marked a turning point as the selling rate has dropped back and the year-on-year comparisons have turned negative. While the French market has now entered a period of relatively weak sales, on the plus side the economy is reasonably well-placed and the removal of the scrappage scheme should have less impact on this market than elsewhere as it was reduced in increments through last year.
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By GlobalDataThe Spanish market fell 23.3% in April. A selling rate of 870,000 units/year was only slightly better than in recent months and remains well below the market norms that were achieved for most of the last decade.
JD Power said that the latest result for Spain once again supports our view that the Spanish market will see a double-digit percentage drop for the 2011 full year and that any recovery over coming years will be a slow one.
In Italy, the selling rate picked up a little in April though this market also looks set to be lower for the 2011 full year versus 2010.
The UK car market fell 7.4% last month, the tenth successive month to see a decline. The selling rate was fairly strong but this includes distortions relating to the public holidays seen last month in the UK. The concerns over the full impact of the government austerity measures will continue to negatively impact the car market through the year, JD Power said.
JD Power Automotive Forecasting forecasts that the Western Europe car market will turn out flat on last year at around 13m units this year.
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