Figures released by market analyst and forecaster JD Power show the West European car market up by 3.9% in November (to 1.17m units), boosted by a pull-forward of sales ahead of a VAT increase in Germany.

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JD Power said that the cumulative West European market to November is 0.8% ahead of the same period last year at 13.75m units.


November sales in Germany are estimated at 326,000 units, an increase of 18.1% on last year. The seasonally adjusted annualised selling rate (SAAR) for Germany leapt to over 3.8m units/year. The forecaster said that another strong German result is expected in December.


Consumers in Germany are bringing purchases forward ahead of a planned three-percentage-point in German VAT in January.


JD Power said that West European car sales in 2006 are now forecast at 14.79m units, marginally ahead of last year’s 14.67m total. A market of 14.71m units is forecast for 2007.

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However, the forecaster noted that ‘the price for this exuberance will, of course, need to be paid in January and Feburary, but the brevity of the VAT-induced increase in late 2006 means that the payback period should also be short lived’. A 2007 car market of 3.4m for Germany is forecast.


If the German market is excluded, the picture in 2006 is still one of improvement on the year-to-date, JD Power says.


Italian and Spanish sales have been responsible for this mild upswing with some support from the recovering market in the Netherlands and also Sweden.


Weakness in France remains a concern. A disconnect has emerged between positive news on consumer spending generally (and confidence survey responses), and car sales, JD Power says. The current difficulties experienced by the French automotive industry may result in government help — but this is unlikely to take the form of a market incentive.


Car sales in the UK declined again in November, but JD Power notes that the rate of decline (a 2% fall in November) is slowing.


See also: GERMANY: VAT effect brings surge in November car sales