With only MPV (minivan) and sports utility vehicle sales sustaining growth in the European car market, fierce competition for sales in these segments is adding to downward pressure on manufacturers’ revenues, according to the latest quarterly pricing survey by PricewaterhouseCoopers and eurocarprice.com.
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Sales of ‘traditional’ cars are declining in all segments and the overall market growth of 1.8% in the last 12 months is entirely due to booming sales of MPV (+22%) and Sports Utility Vehicles (+15%). Analysis shows that average prices for MPVs and SUVs both rose by 2.1%, while the average price increase for Europe as a whole was 2.6%.
Spokesman Chris Hibbs said: “When you examine the data, the biggest concentration of sales growth is in the MPV and SUV body styles and the luxury segment. Increased competition has put downward pressure on vehicle prices resulting in lower price increases for these vehicles.”
According to the study – a unique volume-weighted measure of relative new car prices – the most expensive market is Denmark where new car prices are 105% higher than the euro zone average. The least expensive is Czech Republic, at 8% below average.
The UK car market has been in decline for six months and is now more than 4% down year-on-year. The decline has been the most significant in the smaller car segments. As in most other markets, sales of MPVs are growing at a very high rate (+14% per annum) but this is at the expense of wagon (estate) sales, which are declining by 8% a year. Diesel sales continue to rise, increasing by 9% while petrol model sales are falling.
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By GlobalDataAlthough the MPV/SUV segments are bucking the European trend in the UK by showing significant price increases as well as healthy rises in sales, UK new car prices overall recorded a rise of only 0.2%. This was the smallest increase of any market except the Czech Republic, where prices have fallen over the last year. Prices fell in several UK segments, with the biggest drops in the upper medium and compact executive segments.
Average retail new car prices in the UK, which used to be more than 30% higher than in Europe, are now 4% lower than in the euro currency zone as a whole.
Spain is experiencing the largest market growth of the “big five” markets. Spanish prices are also increasing faster than the European average. Italian prices are also increasing significantly despite the market there declining. Germany has below average market growth and price increases. The UK market is dropping and prices are virtually unchanged compared to 12 months ago.
Prices are increasing in Denmark by 5% per annum and the market is growing significantly. Retail prices there are the highest in Europe, due to the exceptionally high levels of taxation on cars in this country, but pre-tax prices are amongst the lowest: there is evidence that manufacturers are raising pre-tax prices up towards the European average.
The picture in Eastern Europe is mixed. Prices in Poland are increasing significantly (+5.4%) despite the market dropping by over 20%. In Hungary, both the market and prices are virtually static. The Czech Republic is the only market showing an average decrease in prices in a market that has declined by 9%.
Average retail prices for cars in Western Europe have generally moved closer to those in euro currency countries since the index was launched in 2000. There are some clear regional patterns in retail prices across Europe. Prices are generally high in the Scandinavian countries due to higher-than-average taxation levels.
