EU new-car market sees ten-month growth trend in May

23 June 2023

The EU’s new-car market saw significant growth in May, continuing a trend that has spanned the last 10 months.

Nearly a million units were registered last month, a rise of 18.5% compared to May 2022, according to new figures from the European Automobile Manufacturers’ Association (ACEA). It was the second-best month for car registrations in almost two years and highlights the recovery of the automotive market after a difficult period when COVID-19 and supply-chain shortages have had serious impacts.

Year to date, the passenger-car market is 18.5% up on the first five months of 2022, thanks to the successive months of growth. However, the industry may only be riding the crest of a wave that is about to reach the shore. Figures for 2023 have so far been compared to months last year when carmakers were delaying deliveries due to parts shortages, especially semiconductors. As these cars were eventually received by customers in the second half of the year, the numbers were artificially inflated.

Therefore, while current figures highlight a recovery from that period, the possibility of a total recovery from all automotive industry impacts may not be known until after August. Compared to 2019, the last registration figures not impacted by COVID-19, registrations in May this year were 33% down, while year to date, the market dropped 34.8%, representing over 2.3 million fewer units.

Only two markets in the EU recorded drops last month, with Malta’s market falling 18.4% and Hungry posting an 11.2% loss. The big four markets all recorded strong growth, with Italy up 23.1%, Germany up 19.2%, France up 14.8% and Spain up 8.3%.

BEVs impress but PHEVs stabilise

Registrations of new battery-electric vehicles (BEVs) rose by an impressive 70.9% in May, with 129,847 units delivered. This equates to a market share of 13.8%, up from 9.6% last year.

All markets, apart from Cyprus and Malta, recorded increases in BEV registrations, with the Netherlands leading the way, up by 118.4%, with Sweden next, recording an increase of 82.6%. Figures like these resulted in an EU-wide cumulative increase of 50.5%, with 545,441 BEVs registered.

Plug-in hybrids (PHEVs), however, did not fare as well. Figures remained stable, with a decline of 0.6% in May, due mainly to a collapse in Germany, which was once the fuel type’s biggest market, leading to a 40.5% decline. This is likely due to the discontinuation of incentives for PHEVs. Year on year, the fuel type declined 3.3% across the EU, while its market share deteriorated from 8.8% in May to 7.4%, and across the first five months, it currently holds a 7.2% share.

Overall, plug-in vehicles saw a 36.7% rise last month, and currently hold a 21.2% market share. The stabilisation of the PHEV market has done little to harm the overall figures for plug-in technology thanks to the continually improving performance of BEVs.

Mixed picture for petrol and diesel

Petrol models continue to dominate, however. The fuel type saw 342,806 registrations, up 12.6% compared to 2022, while year-to-date registrations were up 17%. Petrol held 36.5% of the market in May, yet while it leads the way, figures were down compared to the 38.4% it held in the same month of 2022. Over the year, its share has dipped only slightly, down 0.4% to 37.3%.

The dramatic decline of diesel seems to have come to an end, mainly due to the small numbers that are now sold in the new-car market. A decline of 2.9% in May equated to a loss of just 3,958 units across the EU, while year to date, the fuel type is down by just 0.1%. Overall, diesel remains the EU’s third most popular propulsion technology, even though its market share has suffered a more dramatic decline, down from 17.4% to 14.3% in the month, and sitting at 14.8% for the year to date.

Second place in the market is held by hybrid-electric vehicles (HEVs). Their registrations increased by 27.6% in May, a market share of 25%. Figures broke through the one-million barrier in the first five months, the total 1,102,992 units corresponding to a year-on-year increase of 27.1%. They now hold a cumulative market share of 25.1%.

While there is likely to be a drop in the impressive figures recorded so far this year once the industry catches up with itself, the current growth of registration figures suggests the market will end 2023 up on 2022. The current months may give more insight into how the market is fairing. However, compared to a full year of undistorted numbers from 2024, it may not be until 2025 that a clear picture emerges of how the automotive market might recover.