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Customer LoginsSame-Day Analysis: Europe: EU CV sales rise strongly in November – ACEA
Commercial vehicle (CV) sales in the EU have grown by a strong 17.8% y/y during November as both categories contributed very positively to the improvement.
IHS Automotive perspective
- Significance: CV sales in the EU have grown by a strong 17.8% y/y during November to 179,930 units.
- Implications: The regional growth has been driven by both the LCV and MHCV categories as a variety of factors contributed to this improvement.
- Outlook: IHS Automotive sees registrations of LCVs under 6 tonnes recording growth in the EU of more than 8.0% y/y, with sales of 1.68 million units, while MHCVs over 6 tonnes are forecast to experience strong positive growth for the full year.
Commercial vehicle (CV) registrations in the European Union (EU) during November saw a significant resurgence after growth slowed during October. According to the latest data published by the European Automobile Manufacturers' Association (ACEA), the number of light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs) registered during the month rose by 17.8% y/y to 179,930 units. This has taken growth rates for the first 11 months of 2015 to 12.2% y/y to 1,887,274 units, which also underlines the gains recorded in earlier months of the year. Registrations in European Free Trade Agreement (EFTA) markets have recorded gains of a similar magnitude during November, with an increase of 14.0% y/y to 6,648 units, although the year to date (YTD) highlights some of the weaknesses earlier in the year as it increased by just 6.1% y/y to 68,742 units.
European LCV registrations
LCV registrations make up around 80% of the CV market in the EU and this continued during November. Vehicles of this type with a gross vehicle weight (GVW) under 3.5 tonnes rose 16.7% y/y to 148,322 units taking its YTD to 1,553,344 units, an increase of 11.4% y/y. All the key markets have risen this month, but to greatly varying degrees. The smallest increase has come from the largest market for LCVs, France, which increased 4.4% y/y, while the UK also showed only a single-digit percentage growth rate. However, Italy and Spain - which are still recovering from their economic malaise - have risen 29.8% y/y and 58.7% y/y respectively. Even Germany has benefited from a significant improvement of 17.4% y/y this month, despite being the third largest market in the region this year.
In the rest of the market, no declines were seen. Many of the larger gains were recorded by markets that are benefiting from some of the biggest economic rebounds after suffering the deepest falls at the height of the European economic crisis. These markets included Portugal, Greece and Ireland as well as those in Central Europe. However, even relatively stable markets such as Netherlands, Belgium and Austria recorded high levels of buoyancy this month.
European MHCV registrations
MHCV registrations in the EU rebounded in November after a particularly weak October. The number of trucks with a GVW of more than 3.5 tonnes has grown 22.9% y/y to 28,013 units which helped support a gain in the YTD of 15.6% y/y to 298,113 units. The market growth was slightly stronger in the heavy commercial vehicle (HCV) category with a GVW of over 16 tonnes; registrations increased 25.1% y/y to 22,423 units, with its YTD now standing at 239,117 units, an increase of 19.1% y/y. One of the key reasons for this has been the UK market, which benefited from a low base of comparison against November 2014, and has instead grown by 55.1% y/y. Elsewhere in the region there were also some good performances including double-digit percentage gains in Italy and Spain. Other markets which have economies also on a recovery track have also recorded strong increases.
Outlook and implications
A combination of factors have helped to lift CV registrations in the EU this month. The entire market has benefited from an additional working day during November against 2014 - 21 days versus 20 days. This has also resulted in some payback for last month's decline when many markets had one less working day. Furthermore, the UK market has substantially contributed to the gain in November thanks to the low base of comparison caused by a pull-forward recorded in October 2014. At that point last year, registrations more than doubled as customers pulled forward orders to avoid new whole vehicle type approval regulations that came into force at the end of the month and affected the manufacture of complete and incomplete trucks over 3.5 tonnes and new types of special purpose vehicles. This caused registrations to sink in November 2014 once these rules were brought in.
Nevertheless Ewa Root, IHS Automotive's MHCV global sales forecast manager, points out that the majority of EU countries have experienced strong demand for MHCVs this year, driven primarily by a strong economic growth. She notes, "Some of the countries, such as Italy and Spain have taken long time to recover from the recession and truck demand there was very low for years. In 2015, we see some improvement in these countries as their economies start to recover. Also the replacement demand plays an important role, as after many years of weak truck sales many companies are under pressure to renew their fleets." The Spanish market gained an additional boost from scrappage incentives and subsidised financing that were launched this year.
In the newest members of the EU, increased freight activity is driving the demand for MHCV, pointing to markets such as Poland, the Czech Republic and Romania. Root says, "Their role in the European haulage sector is becoming increasingly important and as their economies grow, demand for trucks expands." In addition, truck parcs in many of the Central European countries are very old, hence a replacement demand plays an important role there too."
Going forward, demand for HCVs will be more modest as exports in the region will be hampered by lacklustre global growth. In number of countries tight credit conditions and high interest rates will hinder economic expansion. Our forecast for CVs with a GVW over 6 tonnes puts growth for 2015 at around 15.5% y/y to over 300,000 units, before rising to a little over 350,000 units by 2019.
IHS Automotive also expects registrations of LCVs under 6 tonnes to record further improvement during 2015. Growth in the EU, while failing to match last year's pace, is forecast to be over 8.0% y/y, with sales of nearly 1.68 million units as the markets where demand stalled continue to require replacements. We also expect gains to continue until at least the end of the decade, when sales will hit almost 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.