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Customer LoginsEU commercial vehicle registration growth weakens in September, still up 6.0% y/y – ACEA
Commercial vehicle registration growth in the EU has weakened during September, but still grew by 6.0% y/y during the month.
IHS Markit Perspective
- Significance: Commercial vehicle registration growth in the EU has weakened during September, but still grew by 6.0% y/y during the month.
- Implications: The gain this month is now more representative of the state of the region given the lack of negative or positive working day factors as LCVs drive the wider improvement.
- Outlook: After a strong first few months of the year, IHS Automotive expects that growth rates will ease further in the final quarter of 2016 in both the LCV and MHCV categories.
Commercial vehicle registration growth in the European Union (EU) has weakened compared to some earlier months during September, according to the latest data published by the European Automobile Manufacturers' Association (ACEA). The number of light commercial vehicles (LCVs), medium and heavy commercial vehicles (MHCVs), and medium and heavy buses and coaches registered during the month increased by 6.0% year on year (y/y) to 220,781 units. Nevertheless, the extent of earlier gains remains well in evidence with an increase of 13.1% y/y to 1,717,237 units.
Registrations in European Free Trade Agreement (EFTA) markets - Iceland, Norway, and Switzerland - were better than earlier months during September. During the month, it rose 8.3% y/y to 6,509 units. The recent increase has helped lift growth during the first nine months by 4.9% y/y to 58,484 units.
Registrations of LCVs - a category that comprises vehicles with a gross vehicle weight (GVW) of less than 3.5 tonnes - had a share of the EU CV market of well over 80% during September. Driving this achievement has been a gain of 6.8% y/y to 185,415 units. During the month, only four out of the five largest markets rose. The Italian market surged by 46.3% y/y and the Spanish market recorded a 12.2% y/y gain as both continue to recover from weak performances on relatively improving economies as the need for replacement. The German market has also increased by 5.6% y/y and the UK is up by 1.9% y/y, the latter particularly impressive given the long string of gains the market has already seen and this being one of the two biggest selling months of the year due to the age related number plate change in September. The exception to this positivity has been the French market which recorded a dip of 2.1% y/y.
Elsewhere in the EU, there was a mix of performances. The markets that showed both the deepest falls at the height of the economic crisis and then the biggest rebounds have risen, including Portugal and many in Central Europe. However, even relatively stable economies such as the Netherlands, Finland and Sweden have put in exceptionally strong positive contributions. Notable decliners included Slovakia, Poland and Austria.
Overall, in the year to date (YTD), LCV registrations have now grown by 13.5% y/y to 1,422,657 units.
The smaller selling MHCV category had another weaker month than the LCV category during September. The number of trucks with a GVW of more than 3.5 tonnes registered in the EU has grown just 2.2% y/y to 31,452 units. Nevertheless, its rate of growth in the YTD remained at double digit percentage rates of 12.8% y/y and now stands at 265,533 units. Supporting this rate has been the heavy commercial vehicle (HCV) category with a GVW of over 16 tonnes which increased by 2.9% y/y to 25,889 units, which helped sales in the first nine months to reach 215,495 units, an increase of 14.1% y/y. On a market basis, it has been a mixed performance with market leader Germany seeing a solid 3.4% y/y gain. Even more impressive have been the double-digit percentage gains in some of the region's larger markets including France, Italy, Poland and Spain. However, there was a considerable 30.9% y/y drag in the UK, compounded by large decreases in Hungary and Slovakia.
Outlook and implications
After recent months of fluctuations due to working-day factors, September is perhaps well placed to provide a true picture of the situation in the European CV market without any seasonable factors.
The LCV market in the EU remains firm, increasing for the 37th month in succession. Many markets are still benefiting from vehicle replacement after the drag from the Eurozone crisis, which is compounded by gain from a low base of comparison. For some there are also factors such as economic factors and low interest rates which are spurring businesses to buy vehicles, as well as incentives. Even the UK has recorded some modest growth despite the long trend of growth that has been recorded and the Brexit vote at the end of June. However, it is highly likely that many of the registrations being made this month are fulfilling orders placed prior to the vote. IHS Automotive anticipates that the rate of decline in the UK will be accelerated beyond the rate that had been previously expected before the vote and will continue to watch for any further impact across the region. Currently we see that registrations in the EU in the full-year 2016 will be up by around 1.874 million units, a gain of around 8.0% y/y. We also see a further marginal improvement to come during 2017 and holding firm in 2018.
As for the MHCV market, Ewa Root, Manager of the Global Truck Sales Service said that demand in Europe continues to surprise on the upsides that are being generated. Nevertheless, Root adds, "We still maintain our view that this level of sales is not sustainable, especially that the rates of growth have already begun to moderate in the second half of 2016 and countries such as Greece, Hungary and the UK have registered negative growth in September." She notes that the latest indicators were mixed amid heightened economic and political uncertainties. While exports were up in recent months as global growth has improved modestly and the euro is still relatively competitive, consumer confidence has fallen and investments have stagnated across the region. Furthermore, even though European economies have seemingly been resilient in immediate aftermath of Brexit vote, the UK leaving the EU could yet have marked economic and political repercussions. Uncertainties are most likely to mount once the UK triggers Article 50 of the Lisbon Treaty by the end-March 2017. IHS Automotive's latest forecast projects a positive demand for heavy trucks in Europe in 2016, but below the current rate of growth, while in 2017 demand is expected to decline.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.