Early estimates suggest that the European car market surged ahead in December as carmakers sought to reduce stock levels and competition in the form of customer incentives intensified. The result continued the pattern of recent months.
Figures released by JD Power-LMC suggest that sales in December were up by almost 7% in December to 1.05 million units. The Seasonally Adjusted Annualised Rate (SAAR) was put at 16.5 million units, ‘far greater than any result earlier in 2004 or, in fact, any other year.’
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JD Power-LMC estimated that European sales for 2004 as a whole reached 14.65 million units, some 2.2% ahead of the previous year.
Gains were prevalent in the large markets, particularly in Germany, Italy and Spain, with the previously depressed German market seeing 22% year-on-year growth in the month. The German market, Europe’s largest, finished the year at 3.267 million units – 0.9% ahead of the previous year.
However, JD Power-LMC said that December proved beyond doubt the positive impact of incentives on sales and also attributed a part of the strong gain to end of year stock reduction policies.
But the forecaster warned: ‘Once stock has been reduced to a manageable level, and we must assume that December will have gone some way towards this end, the next phase will be a more diligent alignment of output with demand. Sales in January sales will likely pay the price for the exuberance of the market in December, as was the case 12 months ago.’
