• European car market outlook weak, despite October's jump
Europes new car market is flat this year, with little growth in prospect for 2020

Europe's new car market is flat this year, with little growth in prospect for 2020

Data released today by the European vehicle makers' association ACEA shows that the European Union's new car market grew by 8.7% in October.

However, much of October's growth reflects changes to the EU's vehicle emissions testing rules that distorted the market last year, so there's a base effect on the annual comparison.

Analysts say the real picture is of new car demand in Europe hitting a ceiling this year, market growth flat on 2018's level.

ACEA's data shows that the EU passenger car market grew by 8.7% to reach 1,177,746 units registered. This marked the highest October total on record since 2009. During the same month last year, registrations fell by 7.3% after the WLTP emissions test came into effect, setting a low base of comparison for 2019. As a result, nearly all EU countries posted increases in October, with the exception of Cyprus and the United Kingdom.

Four of the five major EU markets noted strong gains, Germany (+12.7%), France (+8.7%), Italy (+6.7%) and Spain (+6.3%), while car sales contracted in the UK (-6.7%).

From January to October, new car registrations in the EU were down 0.7% compared to the first 10 months of 2018. Although demand increased across the EU in September and October, Germany (+3.4%) remained the only major European market to record growth so far in 2019. By contrast, Spain  (-6.3%) and the United Kingdom (-2.9%) saw the strongest declines 10 months into the year, while the Italian (-0.8%) and French (-0.3%) markets have almost recovered to 2018 volumes.

After several years of bumper new car markets in Europe, underlying demand in 2020 will be weakening and economic headwinds could send the market down - with adverse consequences for carmakers struggling to be profitable in the region.

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