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Customer LoginsSpain passenger car sales rise 10.9% for full year and 9.3% in December; Italy posts rises of 13.1% and 15.1% respectively
Spain's and Italy's passenger car sales recorded solid growth in 2016 but the outlook moving into 2017 appears far more uncertain.
IHS Markit perspective
- Significance: Passenger car sales have posted healthy increases in Spain and Italy with a full-year uplift of 10.9% year on year (y/y) and 13.1% y/y, respectively.
- Implications: While the 2016 gains are promising they should be considered in the context of low base levels with the prospect of future macro and political uncertainty in both countries.
- Outlook: IHS Automotive expects another healthy improvement in Italy, despite the potential upheaval caused by the recent referendum result and subsequent change in government, but we expect more-or-less static figures for Spain in 2017.
Italy's passenger car market improved strongly in both December, with an increase of 13.1% year on year (y/y) to 124,438 units, and the full year, up 15.8% y/y to 1,824,968, according to data from the national association of foreign vehicle makers' representatives (Unione Nazionale Rappresentanti Autoveicoli Esteri: UNRAE). The December result was particularly impressive as the month had one less working day than in 2015.
Fiat, the perennial leader in Italy, recorded a strong year roughly in line with the overall market, with its sales up 17.1% y/y for the full year to 385,678 units. Its December sales rose at only 12.9% y/y to 26,567 units. Fiat's vigorous sales throughout 2016 have been supported by ongoing strong sales of the market's best-seller, the Panda. The 500 family in all its guises has also been an important factor, with the 500L, 500, and 500X occupying third, fourth, and seventh places respectively in the full-year sales chart. The new C-segment Tipo has also made a positive contribution.
Other FCA brands have enjoyed a tougher year, with low single-digit full-year improvements for the Alfa Romeo, Jeep, and Lancia/Chrysler. However, the signs moving into 2017 look positive for Alfa with the new D-segment Guilia boosting December sales by 40.1% y/y to 2,991 units.
Volkswagen (VW) was second for the full year with sales of 139,057 units, posting a very similar gain to Fiat with a rise of 16.8% y/y. Its sales in December shot up 22.6% y/y to 10,124 units. The brand had the sixth-best-selling car overall in the Italian market in 2016 with the Golf, which sold 46,659 units. VW's impressive December performance coincided with appearances of both the Golf and the Polo in the top 10.
Ford was the third best-selling passenger car brand in Italy in 2016 with sales of 124,257 units, up 13.7%. Its December sales rose at the slower rate of 10.3% y/y to 7,384 units. Renault came fourth in the full year with a significant increase of 24.7% y/y to 118,283 units. It also had the best-selling foreign car in the market as its Clio took fifth spot with 47,523 units. Fiat, VW, Ford, and Renault also maintained their year-to-date order in December.
With the Spanish market still recovering from a low base, its passenger car sales climbed 10.9% y/y for the full year to 1,147,007 units. Sales in December also continued the positive trend with a 9.3% y/y rise to 96,866 units, according to the full-year data published by the Spanish association of passenger car and truck manufacturers (Asociación Española de Fabricantes de Automóviles Turismos y Camiones: ANFAC).
In terms of the leading brands, there was a very close race in which Renault just pipped Opel to the post after the German brand had led the sales charts at the end of November. Renault registered a strong December to post a full-year tally of 90,503 units, above Opel's 89,382. In what must be the closest race of all the major European markets in brand terms, the Volkswagen (VW) passenger car brand recorded a full-year figure of 89,102 units. In fourth place for the full year was Peugeot with 83,523 units. VW Group-owned local brand SEAT was third with 77,643 units. December's sales table was led by Renault, far ahead of its rivals with sales of 10,124 units, which suggests a hugely aggressive discounting and incentive regime over the period, while Peugeot was second with 7,871 units and VW third with 7,599.
On a model-by-model basis, Renault's very strong December and ultimate ascent to the top of the 2016 passenger car sales charts in Spain was fuelled in particular by strong sales of the Megane and Clio, which were the sixth and eighth best-selling cars respectively in Spain in 2016, with sales of 26,040 and 25,357 units. VW and Seat also each had two models in the full-year best-seller list with the Polo and Golf and the Ibiza and Leon respectively. Renault's strong December result was helped by the Megane going to the top of the sales charts on what is likely to be a one-off basis with sales of 3,201 units while the Clio was third.
For the full 12-month period, the best-selling model was the Citroën C4 with 34,615 units, despite Citroën only being sixth in the full-year brand sales chart. The Leon and Ibiza were second and third. The Nissan Qashqai was the top-selling crossover, although this may change in 2017 when sales of the Seat Ateca come fully on stream.
Outlook and implications
While the Italian market's improvement in 2016 is a positive development it must be viewed against the longer-term development of the market. While the 1.83 million passenger car unit sales for the full-year in 2016 are more than half a million above the figure as recently in 2013, they should also be compared with the pre-financial crisis peak of nearly 2.5 million units in 2007. However, the positive trend should be acknowledged and it coincides with a recovery in consumer confidence and increasing purchases of durable goods and big-ticket purchases. Company car purchases should also be boosted moving into 2017 as company cars that are not capital assets will be excluded from the "Super ammortamento" tax from 2017. But the 4 December referendum on constitutional reform that went against former prime minister Matteo Renzi could scupper this recovery in confidence and lead to a political crisis that also threatens to undermine the financial stability of the country's already stressed banking sector. For 2017, IHS Automotive's latest forecast is for Italy to post sales of 1.93 million units, up from 1.82 million in 2016.
Spain's GDP recovery has been taking place since 2013 but is expected to slow during 2017 amid the fallout from the Brexit vote and the confused domestic political scene. In addition, the economy is still characterised by a troubled labour market (given the 18.9% unemployment rate during the third quarter of 2016) and households have endured significant past income and wealth losses. Prior to the UK vote, IHS Automotive had assumed growth would remain solid in the near term but would lose momentum gradually. However, intensified economic and financial risks arising from Brexit are set to contribute to a sharper slowdown in 2017. The uncertainty set to engulf the Eurozone economies presents a further headwind to Spain's recovery momentum. Also, as noted previously, Spain has significant economic, social, and financial ties with the United Kingdom, which will likely deepen the hit and extend the effects into 2018. Therefore, after expanding 1.4% in 2014 and 3.2% in 2015, the economy is projected to grow 3.2% in 2016 and 2.1% in 2017, according to the December forecast. Car sales have also been boosted by the continual renewal of the PIVE Plan scrappage incentive scheme in recent years but this was withdrawn after the first half of the year. The subsequent slowdown in momentum has been predictable, although company and hire car fleet renewals have remained strong. IHS Automotive forecasts sales in Spain will rise from 1.15 million in 2016 to 1.18 million in 2017.
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.