Dissecting European new-car markets’ double-digit growth in March

13 April 2023

Spain, Italy and France all enjoyed double-digit year-on-year growth in March. Alongside promising first-quarter figures, this seems to indicate a healthy comeback for three of Europe’s key automotive markets.

With 99,524 new-car registrations last month, Spain saw a 66.1% year-on-year increase. Compared to March 2022, Italy experienced a growth of 40.8% with 168,294 units, and France climbed 24.2% with 182,713 units.

The first quarter figures also appear promising at first glance. In the first three months of 2023, Spain saw 237,672 new cars take to the road, a year-on-year increase of 44.6%. Meanwhile, Italy and France recorded 427,019 (up 26.2%) and 420,890 (up 15.2%) registrations respectively in the same period.

However, 2022 does still offer a low base of comparison which continues to effectively magnify current results. ANFIA president Paolo Scudieri highlighted the difficulties with using last year as a point of comparison.

He said that while the Italian market grew last month, this was ‘largely due to the comparison with the heavy drop in March 2022 (down 29.7%), which had been impacted by the 'waiting effect' for the implementation of incentives provided by last year's Energy Decree.’

In March 2020, all three markets felt the first effects of the pandemic, with new-car numbers falling significantly. Against this point of comparison, Spain, Italy and France all saw treble digit increases in the same month this year. But when compared with the March of pre-COVID 2019, this year’s registrations showed double-digit declines across all three countries.

More optimistic outlooks

All three markets outperformed Autovista Group’s expectations in March, with deviations ranging from 2.3% in Italy to 0.5% in Spain and 0.3% in France. Therefore, the 2023 forecasts have been adjusted for the three countries with Italy’s new-car market now expected to see 14% year-on-year growth, Spain 12.6% and France 11.7%.

Economic strains stemming from high inflation and swelling energy prices have put consumer confidence under pressure in recent months. However, rates of inflation did fall in all three markets in March.

Eurostat, the EU’s statistical office, estimates the rate of inflation in Spain fell by almost half from 6% in February to 3.1% last month. France and Italy also saw their estimated rate of inflation drop to 6.6% and 8.2% respectively. However, economic challenges do remain for European new-car markets.

Firstly, these are only month-on-month improvements. Compared with March 2022, both France and Italy saw inflation increase from 5.1% and 6.8% respectively. The European Central Bank raised interest rates last month in an effort to keep inflation under control. But whether these efforts will be successful in the long term is another question.

Additionally, due to the enormous decline in registrations in 2020, there will be fewer companies de-fleeting at the 36-month mark. The positive influence of improving supply will also decline as carmakers’ order backlogs clear. The war in Ukraine poses an ongoing threat too, as any escalation threatens both supply chains and energy prices.

EVs stay up in France

Data published by France’s automotive-industry association, the CCFA, reveals that there were 182,713 new cars registered in the country last month. This equates to an increase of 24.2% compared with March 2022. This is also a substantial gain on February, which saw a year-on-year gain of 9.4%

The seasonally-adjusted annualised rate (SAAR) did climb to 1.75 million units last month from 1.56 million in February. On the other hand, compared with pre-pandemic 2019, France saw its March figures down 19%. Considering the first three months of the year, the country saw 24% fewer registrations than in the first quarter of 2019.

Electric vehicles (EVs) enjoyed another positive month in the country. France successfully met its 25% market-share record for EVs set in December last year, which was the last month of higher purchase incentives. This was after the share fell to 22% in January before climbing back up to 24% in February.

Autovista Group expects the country to see 1.7 million registrations in 2023, equalling a year-on-year growth of 11.7%. This is still 22.9% lower than the 2.2 million new units France recorded in pre-pandemic 2019.

Incentives in Italy

Industry association ANFIA reported that there were 168,294 new cars registered in March, an increase of 40.8% on the same month in 2022. This is a marked increase on the 17.6% year-on-year gain in February. The SAAR rose again to 1.55 million units, up from 1.41 million in February.

Compared with the 194,302 units recorded in March 2019, Italy saw a 13% decrease in registrations last month. Meanwhile, the country saw 20.6% fewer new cars take to the road in the first quarter of 2023 compared with the same period in 2019.

ANFIA pointed out the promising growth in electric-car registrations last month but highlighted that a bigger push was needed for wider adoption. This includes a remodelling of the country’s current incentives, as well as greater development of both private and public charging infrastructure.

Autovista Group predicts that the country will see 1.5 million new-car registrations in 2023, equating to year-on-year growth of 14%. However, this is a decline of 21.7% compared with the 1.9 million units recorded in 2019.

Surge in Spain

ANFAC reported that there were 99,524 new-car registrations in Spain last month, a year-on-year increase of 66.1%. This is a significant gain on the 19.2% increase recorded in February. Meanwhile, the SAAR rose to 950,000 from 881,000 in the previous month.

‘Registrations are at the gates of 100,000 units per month, very close to their natural volume. The surge in purchases from rental companies, which stocked up on fleets in response to the good tourist expectations for Easter, has contributed to a chain of positive registrations three months in a row and closing the first quarter with a certain air of hope,’ Tania Puche, communications director of GANVAM said.

‘However, we cannot lose sight of the fact that we are still significantly below pre-pandemic levels and that, if we want to turn this growth into a trend, now that production is improving, it is important to boost the market by implementing effective measures aimed at to rejuvenate the park, facilitating access for all renters to efficient vehicles,’ Puche added.

Compared with March 2019, Spain experienced a 19% decrease in registrations. Considering quarterly results, the country saw 237,672 new cars taking to the road between January and March 2023, equating to a fall of 25% against the same period in 2019.

Autovista Group forecasts that the country will see 915,672 new-car registrations in 2023, up 12.6% year on year. But compared to pre-pandemic 2019, this would equate to a fall of 27.2%.