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Customer LoginsItalian passenger car market continues strong upswing as Spain dips
Although the Italian passenger car market continued to flourish in March, demand in Spain dipped for the first time in 30 months.
IHS Automotive Perspective
- Significance: As the Italian passenger car market has grown by 17.4% y/y during March, the Spanish market has slid by 0.7% y/y.
- Implications: The Italian market has continued its gain on the back of strong private demand on the back of incentives and a need for replacements. The Spanish market has been hampered this month by the seasonal impact of the Semana Santa Easter festival that took place in March this year.
- Outlook: IHS Automotive has raised its forecasts for both these markets, with Italy set to grow 10% y/y while the Spanish market is now up 4.5% y/y.
As the Italian passenger car market continues to flourish in March, registrations in Spain dipped for the first time in 30 months.
Italy
The Italian passenger car market has improved further in March as momentum continues in this market. According to data published by trade association UNRAE, registrations during the month have increased by 17.4% year on year (y/y) to 190,426 units. This has further positively contributed to its year to date (YTD) performance, registrations for the first quarter now standing at 519,256 units, a gain of 20.8% y/y.
As Fiat's scale in Italy remains unmatched by its rivals, its sales have contributed heavily to the growth of the market this month. During February, its registrations increased by 21.6% y/y to 41,936 units, amounting to a market share of 22%. This has put its growth during the quarter at almost 25%. Other Fiat Chrysler Automobiles (FCA) brands have also outpaced the market this month. Lancia, despite only having one model on sale in the country, still managed to record a gain of 30.4% y/y to 7,125 units, while Jeep is up 28.1% y/y to 3,845 units, although the early benefits of its popular Renegade are starting to ease. However, Alfa Romeo has struggled this month as its registrations have dipped by 0.3% y/y to 3,136 units due to its ageing portfolio. It will be hoping for some benefits from the introduction of the facelifted MiTo and Giulietta that are being launched, although it is likely to be a few more months before Giulia registrations make an impact after order books open in mid-April.
Other than FCA's brands, the Volkswagen (VW) brand returned to second place in the market after gaining 20.4% y/y to 14,281 units. However, Ford remained close behind, having increased by 25.1% y/y to 14,087 units. Renault also recorded a solid month in March, with a 30.2% y/y increase to 12,203 units. The rest of the market was mixed, with some volume automakers easing off after a strong first couple of months.
Spain
After a 30-month run of gains, the Spanish market recorded a dip during March. According to the latest data released by Spanish trade association ANFAC, the market slid by 0.7% y/y to 111,512 units. However, gains in the first two months of the year put its quarterly rise at 6.9% y/y to 285,495 units.
Opel maintained its standing as the best selling brand in the market with registrations of 9,298 units, a gain of 10.8% y/y. It achieved this through a positive month for its best-selling B-segment Corsa, Mokka sub-compact crossover and Zafira multi-purpose vehicle (MPV), which have easily offset a decline for the C segment Astra. This has enabled its YTD to remain up by 26.5% y/y at 25,007 units.
As for other brands in this market, although the Peugeot brand has increased 7.7% y/y in March thanks to its crossover models such as its C-segment 308, others have not been so fortunate. The VW brand has fallen by 16.8% y/y to 7,755 units as the Polo and outgoing Tiguan sales have slumped, while SEAT has fallen 12.2% y/y to 7,749 units on a weaker performance from the Ibiza and Toledo. Renault, Nissan and Ford have all also recorded double-digit percentage declines in the top-10 this month.
Outlook and implications
The Italian market has been exceptionally buoyant in recent times, which is evidenced by registrations in the first quarter having reached levels not seen since 2010 when an earlier scrapping scheme expired. However, this has been underpinned by incentive campaigns, evidenced by some of the gains recorded by automakers, as well as a 26.2% y/y increase in registrations to private customers during March to take 61.2% of the market, although there is also a strong requirement to replace cars after a period of relative stagnation. However, while growth in the rental market has been buoyant in the first quarter, this has slid by 1.7% y/y in March on a high base of comparison. Long-term rentals rose 2.8% y/y, but short-term hire registrations fell by 6.4% y/y. There has also been a 20.5% y/y improvement in company car registrations. The gains come as the Italian market has exited recession and is undergoing a gradual recovery, supported by a sharp fall in global crude-oil prices, the slide in the euro, and a round of tax cuts on incomes and businesses, as well as strengthening exports. Nevertheless, it still faces ongoing headwinds from fragile, challenging domestic demand conditions in line with the ongoing credit crunch and difficult labour-market conditions. IHS Automotive anticipates that 2016 will bring another year of growth to the Italian passenger car market, although this will not be at the same rate as last year but still an increase of 10.0% y/y to around 1.74 million units.
The run of gains in the Spanish market that lasted two and a half years has now come to an end. However, ANFAC has noted that the main reason for this decline is the seasonal impact of the Semana Santa Easter festival that took place in March this year, but added that the fact that the market remained over 100,000 units this month was a positive sign. The drag this month was primarily caused by weaker registrations to rental car fleets compared to March 2015, and this contracted by 9.7% to 32,330 units. However, registrations to private customers offered little to offset it despite the ongoing Plan PIVE incentives and gained just 0.3% y/y to 51,057 units. Nevertheless, company car demand increased by 10% y/y to 28,125 units. In spite of the recent weakness in the market place, IHS Automotive anticipates that it will see some headway during 2016 with registrations growing by around 4.5% y/y to 1.08 million units. This is close to the around 1.1 million units which ANFAC has previously said the market could reach this year. However, one factor that will come into play later this year is the eventual withdrawal of the Plan PIVE scrapping incentive which will take place by mid-2016, if not earlier. In addition, the solid growth chiselled out in 2015 is set to evolve further in 2016-17. The good news is that exports continue to perform well, while domestic spending is reviving in line with less acute financial and fiscal tensions, lifting confidence alongside lower inflation helping to revive household real incomes. Positive indicators have prompted relatively upbeat near-term growth projections. Specifically, after expanding 1.4% in 2014 and 3.2% in 2015, the economy is projected to grow 2.7% in 2016 and 2.4% in 2017. A sound near-term view reflects the anticipated benefits from a weaker euro and lower oil prices compared with a year earlier. In addition, commodity prices have recently been very weak and are likely to remain muted. These developments should further lift consumers' purchasing power and also significantly help companies' margins, which will support investment and employment. However, near-term consumer and business sentiment could be hurt by the inconclusive general election and the prospect of an unstable minority government, while unemployment remains high and net job creation has been dominated by the use of temporary contracts.
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.