European new car registrations increase 8% in May despite UK weakness

16 June 2017

16 June 2017

According to the latest data released by the European Automobile Manufacturers Association (ACEA), the number of new passenger cars registered in Europe (comprising the European Union and EFTA) increased by 7.7% year on year in April. This equates to more than 100,000 additional new car registrations compared to May 2016.

The total volume of new car registrations amounted to 1,433,236 units, with ACEA reporting that demand ′comes close to May 2007 levels, just before the economic crisis hit the auto industry. The five big markets performed very well last month, except for the United Kingdom. Germany (+12.9%) and Spain (+11.2%) posted the highest percentage gains, followed by France (+8.9%) and Italy (+8.2%).’ As previously reported, the UK new car market declined by 8.5% year on year as a result of the introduction of reformed vehicle excise duty (VED) rates on 1 April and the run-up to the general election undoubtedly cooled the market too. The only other European markets to decline in May were Greece, Ireland and Cyprus.

As a group, the 12 new member states that joined the EU since 2004 again contributed especially positively to demand growth, with registrations up by 17.3% year on year.

For the first five months of the year, European new car registrations have increased by 5.1% with growth in most markets. However, the decline in the UK in May has taken it into negative territory for the first time in the year-to-date, with registrations 0.6% lower than in the first five months of 2016. Only Finland, Ireland and Norway have also suffered a contraction in demand through May.

Virtually all carmakers enjoyed demand growth across the region in May, with even the Volkswagen Group (VW) increasing registrations by 8.4% and therefore gaining market share; up to 24.3% compared to 24.2% in May 2016. The core VW brand also registered 8.4% more cars in May, increasing its share to 11.3% from 11.2% in May 2016. Nevertheless, the market share of both the VW Group and brand is lower in the first five months of 2017 than in 2016, at 23.4% and 10.8% respectively.

Suzuki and Toyota enjoyed the greatest gains in Europe in May, up by 21.4% and 19.6% respectively year on year but the Renault Group, Daimler, Fiat Chrysler Automobiles (FCA) and Volvo also achieved double-digit gains. Opel (including the Vauxhall brand) was the only major European player to register fewer cars in May 2017 than in 2016 but the contraction of 1.8% was a significant improvement on the 13.1% decline suffered in April. The fact that the sale to PSA Group could happen as early as 31 July is undoubtedly welcome news to PSA CEO Carlos Tavares, who is undoubtedly eager to start finding synergies between PSA and Opel and ultimately boost Opel sales and bring it sustainably back into the black.

Aside from Opel, Jaguar Land Rover (JLR) and Japanese brands Mazda and Honda were the only others to report weaker registrations volumes than in May 2016. JLR in particular is of course adversely affected by the weakness in the UK car market but despite this, the group has recently announced record sales globally, buoyed by healthy demand in North America and China.

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