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Customer LoginsEU CV registrations record strong 14.6% y/y improvement in April
The EU commercial vehicle market has had a stronger month in April thanks to more working days in some markets.
IHS Automotive Perspective
- Significance: The EU commercial vehicle market has had a stronger month in April with registrations up by 14.6% year on year as both light commercial vehicles and medium and heavy commercial vehicles contributed to this improvement.
- Implications: The gains this month have come on the back of the greater number of working days in some markets during this month as Easter fell entirely in March. However, both segments are continuing to grow on stronger economies, a need for replacements, and deal making.
- Outlook: After a strong first few months of the year, IHS Automotive expects that growth rates will ease in later months for both the LCV and MHCV segments.
Commercial vehicle (CV) registrations in the European Union have grown by 14.6% year on year (y/y) during April. 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 from 170,179 units to 195,013 units. This has fed into the year to date (YTD), which for the four months is now up by 12.8% y/y to 758,566 units.
Registrations in European Free Trade Agreement (EFTA) markets - Iceland, Norway, and Switzerland - have also improved during the month to now stand at 7,327 units, up 11.4% y/y. This has helped YTD registrations in this region return to positive growth, with sales up by 1.6% y/y to 25,037 units.
The LCV market, which comprises vehicles with a gross vehicle weight (GVW) of under 3.5 tonnes, makes up around 80% of CV sales in the EU. Registrations during the month reached 159,012 units, a gain of 13.6% y/y. During the month, the five largest markets all improved. The largest increases in percentage terms were Italy (+30.8% y/y) and Spain (+18.0% y/y) which easily outpaced the category as a whole. Both were helped by seasonal factors - Spain particularly - while Italy's uplift has come about through firmer economic foundations, a need to replace vehicles and market incentives. The United Kingdom also had a strong month with registrations up by 11.8% y/y, particularly in the wake of the scale of registrations the previous month in response to the biannual age-related number plate change as well the long string of gains in the past. France and Germany had a relatively moderate month in comparison but have still risen by 8.9% y/y and 9.1% y/y, respectively.
In the rest of the region, the majority of markets in the LCV categories recorded some degree of improvement during the April, with some of the largest being reserved for those that are benefiting most from some of the biggest economic rebounds after suffering the deepest falls at the height of the European economic crisis. These markets included many in Central Europe. However, even relatively stable economies such as the Netherlands, Denmark, Finland and Poland have put in strong positive contributions.
Overall, for the first four months of the year, LCV registrations have grown by 11.8% y/y to 625,898 units.
The smaller selling MHCV category has also put in a buoyant performance during April. The number of trucks with a GVW of more than 3.5 tonnes registered in the EU has grown 21.3% y/y to 32,706 units, contributing to a gain of 19.0% y/y during the YTD with sales at 120,330 units. This has been underpinned by a 22.2% y/y rise in the heavy commercial vehicle (HCV) category with a GVW of over 16 tonnes to 26,457 units, with sales in the first four months of 98,397 units, an increase of 19.6% y/y. On a market basis, there has unsurprisingly been an overwhelming upward trend, with many of the biggest selling markets recording significant double digit percentage gains. The exception to this has been the United Kingdom.
Outlook and implications
The CV category has made a further - and stronger - improvement during April, continuing a trend that has been ongoing for 16 months now. There have been some seasonal benefits in April due to Easter falling fully in March this year which has had more impact in some markets than others, and helped offset some weakness in parts seen in March. Nevertheless, the market remains driven by the underlying economic factors that have been positive drivers in lifting the market have boosted business confidence. Industrial production and investment has risen, while rising employment, low inflation and low energy prices are supporting consumer spending, which has been coupled with rising transport demand. In addition, as businesses held off from replacing vehicles at the height of the global downturn and then the more localised crisis, there is now a pent-up need for replacement which is being tapped.
According to principal analyst for IHS Automotive's Medium and Heavy Commercial Vehicle business Ewa Root, the rates of growth in the first few months of 2016 have been particularly impressive, especially in Central Europe. However, this is down to not only down to economic growth but also a weak base of comparison during the first few months of 2015. As a result, we do not think that the current level of growth will be sustainable for the duration of 2016. Nevertheless, it is possible that the market will exceed our expectations and achieve an increase of more than 10% y/y in 2016, rather than our current forecast of just over 5% y/y for Western and Central Europe.
IHS Automotive also expects registrations of LCVs under 6 tonnes to record further improvement during 2016, although smaller than in 2015. Growth in the EU is anticipated to be up by almost 7.0% y/y to 1.85 million, not helped by the normalising expected in the UK. We also expect gains to continue at an even slower pace until at least the end of the decade, when sales will peak at nearly 1.89 million units.
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.