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Customer LoginsSame-Day Analysis: Western European passenger car sales post very strong 12.8% y/y rise in November – forecast
The Western European passenger car market was helped by a positive calendar effect in November but it was still an impressive performance despite that.
IHS Automotive perspective
- Significance
The latest IHS Automotive Western European forecast has shown that the market has posted a very strong uplift of 12.8% y/y in November to 1.04 million units. - Implications
Although all the major sales markets had one extra sales day in November, this was a still a genuinely robust sales increase of around 8% given the seasonal adjustment. However, the market remains heavily reliant on fleet sales and discounting. - Outlook
After 11 months of 2015, the Western European passenger car market is up by an impressive 8.4% to 12.1 million units and is on target to meet the IHS forecast of 13.0 million units. However, moving into 2016 the forecast is for no further rise, which tallies with the growing uncertainty regarding the global macroeconomic and security situation.
Western European sales
The German passenger car market posted a very robust uplift in November with an 8.9% y/y rise to 272,377 units, although like all the other major markets this was supported by the extra working day. This helped the market's year-to-date (YTD) tally rise by 5.4% y/y to 2,958,687 units. The split of sales types stood at 33.6% private sales and 66.4% fleet sales.
The French passenger car market was lifted by the additional working day, with 20 days under consideration versus 19 days during November 2014. With this taken into account, the growth rate falls to 4.6% y/y. Nevertheless, the latest gains have further benefited year to date (YTD) growth, which now stands at 5.3% y/y as the total registrations for the market over the 11 months hit 2,073,061 units.
The Spanish passenger car market has rebounded from the weak single-digit percentage registrations growth during October. Registrations in November have increased by 25.4% y/y to 81,650 units. However, this improvement will have been helped by the additional working day.
The Italian passenger-car market has also risen strongly during November. According to the latest data published by trade association UNRAE, registrations are up by 23.5% y/y to 134,021 units. This has further helped the market's YTD performance which has now recorded growth of 15.5% y/y to 1,464,747 units.
The UK passenger car market has returned to growth during November after stalling the previous month. According to the latest data the number of cars registered this month has grown by 3.8% y/y to 178,876 units. The growth has helped to support the YTD which now stands at 2,453,426 units, an increase of 6.2% y/y.
Outlook and implications
In terms of the top five Western European markets Germany posted a very robust increase in November, despite the fact that leading brand VW significantly underperformed the overall market. However, more than enough brands put in a significant outperformance to make up for VW's shortfall, with Ford, Opel and Toyota all recording accelerated sales increases. It appears there was a consumer reaction to the fallout from the emissions situation on VW sales in November but this is likely to be a short-term phenomenon, with surveys still showing the brand to be held in high regard by German consumers, and any reaction appeared to have limited impact on sales of the Audi brand. For the full year 2015 IHS Automotive's sales forecast has been increased slightly to 3.18 million units, a rise of 4.6% y/y. Moving into 2016 IHS Automotive is forecasting sales of 3.27 million units.
In France growth rates have improved this month. However, it underlines the continuing normalisation process after the swings caused by the challenging economic situation in Europe. France's economy grew 1.1% during the first three quarters of 2015 and this is expected to continue for the remainder of the year and into 2016, boosted by muted inflation, a weak euro, extremely loose monetary conditions, improving confidence levels, and gradually easing credit conditions. All in all, measures aimed at helping businesses will total EUR33 billion in 2016. IHS expects growth to average 1.1% in 2015 and 1.3% in 2016, following 0.2% growth in 2014. IHS Automotive anticipates improvements in light-vehicle sales during 2015. We expect passenger car registrations to increase by around 6% y/y to 1.9 million units supported by a better economic cycle and favourable product momentum, particularly from the French brands.
November was the 27th month in succession that the Spanish passenger-car market has recorded a sales increase. Private demand has supported the gains this month as the eighth and final round of the Plan Programa de Incentivos al Vehículo Eficiente (PIVE) scrapping scheme continues. Registrations have been lifted by 27.5% y/y during the month to 52,836 units. Factors helping to drive these improvements include exports continuing 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. After expanding by 1.4% in 2014, the economy is projected to grow 3.2% in 2015 and 2.6% in 2016, according to IHS' November forecast. Looking to next year, the Spanish cabinet has now approved measures that will make funding for the PIVE8 scheme which is not used before the end of the year available during 2016. ANFAC estimates that this funding could stand at EUR100 million and could help to take the passenger car market to 1.1 million units, although 1.2-1.3 million is said to be required to cut the average age of passenger cars from 11.4 years.
For the Italian passenger-car market, November is the latest month of growth. Private demand has been a strong driver with gains of 25.1% y/y and taking 65.1% of the market. However, the short- and long-term rental market has also been important, with long-term rentals up 19.7% y/y while short-term rental registrations have almost doubled. Company car sales had a relatively moderate month by comparison but still recorded an increase of 10% y/y. Nevertheless, the improvement comes in a market which is at an exceptionally low ebb and returning economic growth faces ongoing headwinds from fragile, challenging domestic demand conditions in line with the ongoing credit crunch and difficult labour-market conditions. IHS Automotive currently expects that the Italian passenger car market will grow by over 13.5% y/y in 2015 to 1.56 million registrations - in line with UNRAE's expectations - with further gains anticipated until the end of the decade as the need to replace becomes even more important.
In the UK, after 44 months of relentless growth, the market is levelling off but the falls are not substantial as many of the reasons for the long growth run remain in place. Registrations are also being spurred by buoyant macroeconomic data; GDP growth reached 0.5% quarter on quarter (q/q) during the third quarter, after a 0.7% q/q gain in the second and 0.4% q/q during the first. This has put GDP growth on course to reach 2.4% during 2015, slightly down from the 2.9% rise in 2014, but still above the 2.2% increase during 2013 and 1.2% during 2012. Looking at the remainder of the year, IHS Automotive is now anticipating UK registrations will reach almost 2.62 million units by the end of 2015, a gain of over 5.5% y/y. For the combined market, sales are still forecast to rise in line with the increase after the first 11 months, with an uplift of 7.7% y/y to 13.1 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. Further components of this service include competitor and country intelligence. Get a free trial.