Passenger car sales in West Europe declined by 0.6% in December, taking the market total to almost 14.8m units in 2006, 0.7% ahead of last year, according to data released by JD Power.

The 2006 market result represented a ‘relatively firm’ performance, according to JD Power, that was in line with expectations. However, the forecaster noted that the Eurozone economy grew by an above trend 2.7% in 2006 and set against that, the car market result is rather less impressive. JD Power maintained that market growth in 2006 was skewed towards business buyers, with consumer demand constrained.

JD Power said that the German market spiked once again in December ahead of a VAT increase, but the forecaster also warned that market watchers should expect a weak start to 2007 in Germany. The German contribution to the gain in 2006 was the largest of all markets, in terms of absolute volume.

The West European car market will therefore begin the year rather weakly as a result of payback from the strong sales in Germany in the final two months of 2006.

The UK market continued to decline due to slower economic growth. The fall of 95,000 units in 2006, compared with 2005, was described as fairly evenly spread across private and business buyers.

The forecaster also noted that the Spanish government has announced that the Prever scrapping incentive will be removed at the end of 2007. Such an event would produce a surge of sales in late 2007 and a very weak start to 2008. However, JD Power said that ‘this move will not be set in stone and automotive industry lobbying to retain the incentive in some form has already started’.

JD Power added that the French market was the biggest disappointment in 2006 with sales contracting by 3% to 2m units. Italian sales, it said, were solid.

Notes : Austria, Benelux, Denmark, Greece and Switzerland: estimates for latest month
UK: includes estimates for non-dealer sales
The percentage change in the final column compares the average selling rate in the year-to-date with the last full year.

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