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Customer LoginsEU CV registrations up 12.1% y/y during Q1, gains continue in March – ACEA
Registrations of CVs in the EU have risen by 12.1% y/y during the first quarter of 2016, supported by further gains in March.
IHS Automotive Perspective
- Significance: Registrations of CVs in the EU have grown by 12.1% y/y to 563,132 units during the first quarter of 2016, supported by a further 8.0% y/y gain in March.
- Implications: The gains during the quarter have been underpinned by double-digit percentage improvements for both the LCV and MHCV categories.
- strong>Outlook: IHS Automotive anticipates that growth will continue during 2016, albeit at a weaker rate than last year.
Commercial vehicle (CV) registrations in the European Union (EU) have grown by 12.1% year on year (y/y) during the first quarter of 2016. 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 this timeframe has increased from 502,519 units to 563,132 units. This has been supported in March by an increase of 8.0% y/y to 242,049 units. However, registrations in European Free Trade Agreement (EFTA) markets - Iceland, Norway and Switzerland - have declined in the quarter and now stand at 17,710 units, a fall of 2.0% y/y. This has been compounded by the retreat in March of 4.3% y/y to 6,707 units.
The LCV market, which comprises vehicles with a gross vehicle weight (GVW) of under 3.5 tonnes, made up more than 80% of CV sales in the region this quarter. Registrations during this time reached 466,839 units, a gain of 11.3% y/y. During March, it was supported by a gain of 7.6% y/y to 204,157 units, the 31st month in succession that growth has been recorded. During the three months, gains were recorded by all five of the big markets in the region, although the rates have been diverse. France, Germany and Spain have put in solid gains of just under 10% y/y, although growth has been weaker during March, most notably in Spain which dipped by 1.3% y/y, partly due to some seasonal impact from Easter holiday falling during the month. The UK market has slowed down during the quarter with a gain of just 1.2% y/y, although this has benefited from a 3.3% y/y increase in March which is one of the biggest selling months of the year due to the biannual age-related number plate change. At the other end of the spectrum is Italy which has improved 30% y/y during the year to date (YTD), supported by a 32.1% y/y gain in March. This improvement has been driven by firmer economic foundations, a need to replace vehicles and market incentives.
In the rest of the region, the majority of markets in the LCV categories recorded some degree of improvement during the quarter, 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 Portugal, Ireland and those in Central Europe. However, even relatively stable economies such as the Netherlands, Sweden and Denmark have put in strong positive contributions.
The smaller selling MHCV category has performed even more strongly this quarter. The number of trucks with a GVW of more than 3.5 tonnes registered in the EU has grown 17.6% y/y to 87,262 units, with a gain of 11.1% y/y to 34,092 units recorded in March. This has been underpinned by a 18.0% y/y rise in the heavy commercial vehicle (HCV) category with a GVW of over 16 tonnes to 71,501 units, with sales in the month of 27,831 units, an increase of 12.2% y/y. On a market basis, there has unsurprisingly been an overwhelming upward trend. Also, many of the largest markets in the region including France, Spain, the UK, Poland and the Netherlands have recorded significant double digit percentage gains.
Outlook and implications
The CV category has continued to record a strong improvement during the first quarter of 2016 after the buoyant performance in 2015. There have been some seasonal benefits in February due to the additional working day thanks to the leap year, although in some markets this has been offset by Easter falling in March this year. 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.
However, according to principal analyst for IHS Automotive's Medium and Heavy Commercial Vehicle business Ewa Root, global economic uncertainties are starting to take their toll on confidence. As a result, we expect that the current level of demand for heavy commercial vehicles in Europe is not sustainable and it will start slowing down to single-digit percentage growth rate by around mid-2016. Overall, we currently see registrations for MHCVs over 6 tonnes standing at around 322,000 units by the end of 2016, an increase of 5% y/y. However, we expect gains to continue until at the least the end of the decade, although this is not expected to reach the heights seen between 2006 and 2008, when registration levels of over 400,000 units were recorded.
IHS Automotive also expects registrations of LCVs under 6 tonnes to record further improvement during 2016, although much smaller than that seen in 2015. Growth in the EU is anticipated to be up by almost 4.5% y/y to 1.81 million, not helped by normalising in the UK. We also expect gains to continue until at least the end of the decade, when sales will hit over 1.87 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.