Analysis by JATO dynamics suggests that the August boom to the European car market ahead of the new WLTP emissions standard test introduction this month was led by a 38% gain in business/fleet customer purchases.
JATO says the European car market grew by 30% in August, to 1.17m units, the highest August result of the last 20 years. It says August was also the highest monthly growth registered in almost a decade, breaking the record seen in November 2009, when volume grew by 25%. But JATO also says that registrations were boosted by stock clearances ahead of the introduction of WLTP.
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Fleet purchases were clearly a growth pole as manufacturers looked to rapidly shift stock on some lines.
Business/fleet purchases posted a 38% increase in August (data for 15 countries), jumping from 53% of total registrations in Aug-17 to 59% last month. This is in comparison to registration growth of 11% in July and 5% in June. In contrast, private registrations increased by 11% in August, counting for 41% of the total. This change was more evident in Spain, Netherlands, France and Austria, where business/fleet registrations grew by 86%, 65%, 54% and 54% respectively. The highest market share for business/fleet registrations were seen in Czech Republic (76%), Slovenia (75%) and Finland (73%).
“As we anticipated last month, it’s clear that registrations were boosted in August by car makers rushing to register their vehicles before the introduction of WLTP. These results show how artificial registrations can be, and how easily they can be manipulated by external factors. The evidence of the WLTP effect shows how ill prepared car makers were, and it will be interesting to see how car makers continue to respond to WLTP in the coming months,” said Felipe Munoz, JATO’s Global Analyst.
The new stricter emissions standards (WLTP) has officially been applied to all new car registrations as of September 1st. In early August 2018, a spokesperson for JATO indicated that the publication of re-homologated models/versions was not progressing as quickly as expected. “It has taken 11 months for 20% of existing models/versions in the market to be re-homologated and published”. As a result of this, the industry faced a backlog of vehicles that could not be registered if the re-homologation was not completed by August 31st.
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By GlobalDataThis, JATO says, explains the 30% increase of registrations seen in August. Many makers decided to register their cars ahead of the deadline in order to clear their stocks of the units that they would not be allowed to sell after August 31st. JATO says they got rid of their units in the easiest way: self-registrations, demo-sales or rentals which are a part of the business/fleet registrations, or through better retail-deals which make up part of the private registrations.
A number of brands saw strong growth in August. But only the top 3 of the top 10 best selling brands outperformed the market’s average growth. Volkswagen‘s volume was up by 45%, boosted by the business/fleet registrations, which increased by 56% and counted for 2 in 3 of the cars registered. This doesn’t entirely explain their volume growth, as the T-Roc continued to gain traction, becoming the 15th best-selling car in August.
Renault also saw a big increase of 72% to almost 100,000 units. While its private registrations jumped by 33%, business/fleet registrations doubled and now count for 61% of total volume. Unlike Volkswagen, Renault doesn’t have a recently launched car to help explain this growth. In comparison, its registrations grew by 20% in July and 1% in June. Audi, ranked third, was up by 33%, boosted by business/fleet registrations, which counted for 73% of the total and increased the volume by 55%.
The remaining seven brands of the top 10 lost market share, with Mercedes posting the highest drop, as its volume fell by 3%. This is mainly due to a 28% drop in its private registrations, while the business/fleet grew by only 3%. Some of the brand’s key products, such as the C-Class, CLA and GLA are now seen as older models and face increasing competition from newer rivals, JATO notes.
The impact of business/fleet registrations was also seen in fuel type, as diesel registrations increased in the business/fleet channels – up 13% against a 10% drop in private registrations. This means that the introduction of WLTP even benefitted diesel cars despite recent decreases in the fuel type. However, the biggest boost was seen in the business/fleet registrations of gasoline cars, which soared by 68%.
SUVs were the clear winners of the month, with their volume up by 57%. They were led by the Nissan Qashqai, which doubled its registrations, the Renault Captur and the Tiguan (excluding the Allspace). The VW T-Roc occupied the fifth position in the SUV ranking and the third position in the B-SUV segment.
See also: West European car market gets 27% WLTP boost in August
