EU new-car registrations to start recovery in second half of 2021

03 February 2021

The European Union’s new-vehicle registration recovery will begin this year with an increase of 10% compared to 2020, according to forecasts from the European Automobile Manufacturers’ Association (ACEA).

The fallout from COVID-19 is expected to continue to affect vehicle markets across the continent during the first quarter of 2021. Registrations should pick up in the second half of the year, as vaccination programmes progress and restrictions ease as a result.

A 10% increase equates to 10.9 million new cars on EU roads this year, higher than the 9.9 million registered in 2020. However, that is still 16% down on 2019, the last full year of non-COVID-19 impacted sales.

There is also the economic impact on the consumer to consider. With markets and carmakers pushing for increases in sales of electrically-chargeable vehicles (EVs), especially buoyed by demand during the pandemic, markets could be in a state of flux for some time to come.

As Autovista Group predicted in December, EU new-car registrations plunged by an unprecedented 23.7% in 2020. Furthermore, sales got off to a deceptively shaky start in some of the big European markets this year. Several European countries also have restrictions on dealerships as COVID-19 cases remain high. It could be a few months before signs of the expected recovery start to show.

New opportunity

′Now more than ever, it is crucial that we work hand in hand with EU policymakers to strengthen the competitiveness of Europe’s auto industry on the global stage,’ stated ACEA president and BMW CEO Oliver Zipse.

′Thanks to the global business model of European vehicle manufacturers and international demand for EU-made vehicles, production facilities in Europe were able to benefit from more swiftly-recovering markets last year, notably those in Asia,’ he noted. ′Nevertheless, the sustainable economic recovery of the European Union and local demand is vital for our return to pre-crisis strength.’

The automotive market has been changing slowly in recent years, with small year-on-year increases in the market share of EVs. There was a notable change in 2020. The EV market share rose to 10.5%, compared with just 3% in 2019.

This was attributable to a series of purchase incentives across the EU to help the industry and reduce air pollution levels. Changing attitudes around travel, developed during the lockdown, could also lead to more interest in EVs during the coming years, as average mileages reduce, and therefore issues such as range anxiety no-longer apply.

ACEA believes that the time is right to ensure the interest in EVs and the growth of the market becomes a core value of the automotive industry. ′With the right policy support, including a massive ramp-up of charging and refuelling infrastructure for alternative fuels across all EU member states, this positive trend can continue,’ Zipse stressed. ′Despite the economic pressures caused by the pandemic, our industry remains fully committed to its ongoing transformation to carbon neutrality.’

Supply-chain worries

Recent issues around semiconductors in the automotive industry have highlighted how fragile supply chains currently are. With the market moving into new areas, sharing technologies with consumer products, the demand of certain materials, especially those used in batteries and shipped from Asia, is likely to thin out unless more is done to establish robust supplies within the EU.

′Our sector is working hard to recover and rise to the challenges ahead. Because an EU automotive industry that is strong – both at home and globally – will not only contribute to strengthening Europe’s economy, but also to reaching its climate ambitions,’ Zipse concluded.