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Customer LoginsSame-Day Analysis: EU CV sales continue upward trajectory in February – ACEA
CV sales in the EU have continued their upward trajectory during February with both LCVs and MHCVs being strong contributors to this growth.
IHS Automotive Perspective
- Significance: European CV sales continued their upward trajectory during February, growing 17.8% y/y and offering a further positive contribution to the YTD.
- Implications: Both LCVs and MHCVs have been strong contributors to this, underpinned by positive economic factors, improved confidence and a need for replacement.
- 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 continued their upward trajectory during February. 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 17.8% year on year (y/y) to 160,062 units. This has helped make a positive contribution to its year to date (YTD) performance with registrations now standing at 320,833 units, a gain of 15.4% y/y. However, registrations in European Free Trade Agreement (EFTA) markets - Iceland, Norway and Switzerland - have made a more marginal 2.6% y/y improvement to 5,768 units, although this has done little for its YTD which remains down by 0.8% y/y at 10,980 units.
The LCV market comprising vehicles with a gross vehicle weight (GVW) of under 3.5 tonnes, makes up over 80% of CV sales in the EU and has now recorded its 30th month of growth in succession thanks to a gain of 16.9% y/y to 131,799 units. This has in turn taken its YTD registrations to 262,692 units, an increase of 14.4% y/y. During the month, gains were recorded by all of the big markets in the region, although the rates have been diverse. Germany and France's gains just behind the increases for the category as a whole, but well into double-digit percentage improvement territory. Larger improvements were recorded by Spain and Italy - the former increasing by more than 25% - as they continue to recover from the low levels hit when their economies were at their worst. However, the UK improved just 0.4% y/y, although this is as a result of the strength of gains during the past few years which led to it attaining record levels during 2015.
In the rest of the region, the majority of LCV markets recorded considerable improvements, 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 Ireland and those in Central Europe. However, even relatively stable economies such as Netherlands, Sweden and Denmark have put in strong positive contributions.
The smaller MHCV category performed even more strongly. The number of trucks with a GVW of more than 3.5 tonnes in the EU has grown 23.4% y/y to 25,974 units, which alongside the gains recorded in January has taken its overall improvement in YTD to 22.0% y/y to 52,924 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 21,052 units, taking its YTD to 43,400 units, an increase of 21.8% y/y. On a market basis, there has unsurprisingly been an overwhelming upward trend. Among the big influencers has been the UK market, where estimated MHCV registrations increased by 32.3% y/y as HCV registrations grew 28.1% y/y. In Italy, MHCV sales jumped 44.4% y/y, with HCV demand up by 41.9% y/y, while in Poland there has been a leap of 42.8% y/y.
Outlook and implications
The CV category is further continuing to record improvement after the strong performance in 2015. Although February has been helped by an additional working day thanks to the leap year, many of the economic factors that have been positive drivers in lifting the market have boosted business confidence. Industrial production and investment has risen (supported by the European Central Bank) which has been coupled with rising transport demand, while low oil prices are also helping matters. 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.
For the MHCV category, numbers are as expected, according to principal analyst for IHS Automotive's Medium and Heavy Commercial Vehicle business, Christoph Domke. However, he adds that as previously noted, we anticipate that monthly and annual growth rates will start to come down from the current double-digit growth rate as replacement need eases off. 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 see gains continuing until at the least the end of the decade, although this is not expected to reach the heights seen between 2006 and 2008 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 2.5% y/y to 1.76 million, not helped by normalising in the UK and Scandinavia. We also expect gains to continue until at least the end of the decade, when sales will hit over 1.85 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.