West European new car sales fell by 57.3% year-on-year (YoY) in May, while the regional selling rate stood at a lowly 6.3m units a year under the weight of the COVID-19 crisis and locked down markets, according to data released by LMC Automotive.
Although the region shows some improvement from the unprecedented fall in April (down 80%), the automotive industry is still in the midst of a deep and unprecedented crisis. The modest improvement in last month’s registration results versus April comes alongside the easing of lockdown measures.
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There were big declines in the region’s largest markets last month. French new car registrations contracted by 50.3% YoY, with the monthly selling rate reaching just 1.2m units a year. The Italian annualised selling rate was 1m units a year, or a 49.6% YoY fall in sales.
In the UK, with dealerships closed, registrations fell by 89.0% YoY to just over 20,000 units. German sales contracted by 49.5% YoY in May, with a selling rate at 1.9 mn units/year. Spanish car registrations managed just 34k units for the month, marking a drop of 72.7% YoY.
German car sales fell 49.5% YoY in May. The German economic package sees a lowering of VAT and, specific to the auto sector, a focus again on BEV/PHEV support rather than a larger broad-based boost as we saw back in 2009 — German registrations fell 49.5% YoY last month.
The impact of the COVID-19 coronavirus has continued to transcend any other concerns in the West European automotive market, LMC noted.
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By GlobalDataLMC said that in terms of the outlook, it is paying particular attention to new government stimulus packages and especially purchase incentive schemes.
A 26% contraction in the market to just 10.6m units is forecast for 2020 (market was 14.29m units in 2019).
LMC analyst Jonathon Poskitt expects to see market recovery in the second half of this year. “We expect selling rates will be on a generally upward trajectory in the second half, supported by lockdown measures easing and vehicle plants resuming activity,” he said. Purchase incentives will help, but Poskitt cautioned that a second wave of COVID-10 presents a downside risk as countries across the region relax lockdowns. “A return of strict lockdown measures would have grave consequences for automotive sales activity,” he added.
