European vehicle sales in November reached 1.11 million units, a decrease of 2.6% in comparison to the same month of 2004. As a result, 11-month accumulated sales across the region reached 13.48 million units, slightly up 0.1% year-over-year.
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According to analyst CSM Worldwide, the western European car sales market had been showing positive signs, slowly gaining momentum from strong demand in 2Q and 3Q 2005. However, the poor start to the last quarter has indicated that this will not be the case throughout the remainder of the year.
Historically, sales during the final three months of the year have always registered as the weakest quarter, targeting 22.5% of total year volumes. Moreover, the growing economic instability coupled with high oil prices have undeniably forced consumers to think twice before purchasing a vehicle in the short term.
Looking forward, the Western European SAAR (seasonally adjusted annualised selling rate) indicates full year passenger car sales reaching 14.5 million units, a slight increase over last year’s results that were largely inflated by last minute registration rushes in November and December.
November sales growth in Italy was not enough to offset continuous weak demand in France, Germany, Spain and the United Kingdom.
Demand in Germany had been picking up since April, posting seven consecutive months of growth, however November sales decreased 2.7% and year-to-date sales are rising 2.7% over last year. CSM correctly estimated that the early positive momentum was destined to slow down as the upbeat demand spurred by the IAA in Frankfurt weakens and consumers await the outcome of the domestic political power struggle. In addition, OEMs will need to ponder repeating the heavy discount strategy of last year’s final month. The full year selling rate projects the market towards 3.16 million units, up 4.6% vs. 2004.
Sales in Spain unexpectedly fell again 4.0% in November, negatively contributing towards a growth rate of 0.9% year-over-year. The market had been strong since 2Q 2003, and positive demand continues to suggest another record year of sales despite the foreseeable slow down. Full year sales target a 1.48 million unit-selling rate, up 1.5% vs. 2004. In order to prevent a significant slow down next year, the government has announced it would extend its PREVER incentive scheme until the end of 2006.
Present year demand in France had posted three consecutive quarters of growth, however sales dropped during the last two months as year-to-date sales continue to rise 3.1% over last year. Looking forward, the year’s final months have proven to be a difficult period in comparison to last year’s heavy discounting that spurred growth. The full year selling rate projects the market towards 2.1 million units, up 4.2% vs. 2004.
The car market in Italy has reported a turnaround in demand following a disastrous start to the year. Demand was falling 9.4% after the first five months, however at present, year-to-date sales are decreasing 1.0% and a full year selling rate suggests that the market reports sales of 2.38 million units, nevertheless confirming a slight negative full year outlook, down 0.1%.
Lastly, in the United Kingdom, car sales continue to experience a complete opposite cyclical trend in comparison to the region’s larger markets. Sales have clearly slowed down since 2Q 2004, posting negative growth rates over twelve consecutive months following four years of consecutive growth. Car sales slumped 7.9% in November. The full year selling rate projects the market towards 2.29 million units, down 5.3% vs. 2004.
