Europe’s new-car market rides crest of wave in March

20 April 2023

The EU’s new-car market continued its growth into an eighth consecutive month, with impressive figures from the four leading markets helping the industry ride a wave out of crisis.

Figures from March, released by the European Automobile Manufacturers’ Association (ACEA), show that the EU market grew 28.8% compared to the same month last year. A total of 1,087,939 units left showrooms, as all but two countries recorded positive figures.

Of the bloc’s biggest markets, Spain led the way with a 66.1% increase, followed by Italy, which ended the month 40.8% up compared to March 2022. France saw growth of 24.2%, while Germany increased registrations 16.6% compared to last year. Only Bulgaria and Malta saw a decrease, 14.5% and 29.1% respectively, but this equates to a total of just 594 fewer cars across the two countries.

Although the headline figures are positive, they are flattered by the comparison to a poor month in 2022. As the semiconductor shortage continued to affect the industry, and delivery times of new vehicles increased, the EU’s passenger car market fell 4.6% last year when compared to 2021.

These delayed deliveries are still playing out, with cars ordered last year only just being registered, boosting the figures. It is only a matter of time before this wave crashes, and a true picture of the automotive market post-COVID-19 becomes apparent.

Compared to 2019, the last March before COVID-19 started influencing registration figures across the EU, the market is down 13.9%. This represents a shortfall of 176,449, when figures from the UK, which was counted as part of the EU in 2019, are removed.

In the first quarter of the year, new-car registrations were up 17.9% compared to 2022, but down 20.4% against 2019 numbers, adjusted for Brexit. Among the four major EU markets, Spain (up 44.6%) saw the highest gains, followed by Italy (up 26.2%), France (up 15.2%), and Germany (up 6.5%).

Surprising fuel-type figures

The EU saw an increase in battery-electric vehicle (BEV) registrations in March, up 58% with 151,573 units, representing a 13.9% market share. Last month accounted for almost half (47.2%) of the quarter’s BEV registrations, totalling 320,987 units. This is thanks to double- and triple-digit percentage gains in most EU member states. The Netherlands was the third-largest market for BEVs in March, recording a gain of 132.6%.

After registration declines in the first two months of 2023, the EU market for plug-in hybrids (PHEVs) posted a 4.3% growth in March. This was not enough to stop the market share of the technology declining last month, falling by 1.6% to a share of 7.2% overall.

While the EU plans to end the sale of new petrol and diesel vehicles by 2035, with a consultation on e-fuels pending, the combined market share of 21.1% for plug-in vehicles is encouraging. However, there is still a long way to go before the technology challenges internal-combustion engine (ICE) models.

Petrol-car registrations increased 29.9% in the third month of the year, with 407,533 units. Diesel had one of its strongest months in recent times, with growth of 11.8% year on year, meaning registrations remained ahead of BEVs with 157,217 units. This growth was helped by Italy registering 38.2% more diesel cars in March, with Spain growing its numbers by 21.1%.

Petrol holds a market share of 37.5%, up 0.4% year on year and an increase on February’s 36.9% figure. Diesel’s share dropped 1.1% compared to March 2022, with the fuel type now holding 14.5% of the market. ICE-powered passenger cars commanded 52% of registrations last month.

Hybrid-electric vehicles (HEVs) had another strong month in March, with sales increasing by 38.1% to 264,694 units. This growth was largely due to double-digit increases in the EU’s four key markets, particularly Spain (up 75.3%) and Italy (up 47.8%). Consequently, HEVs reached a market share of 24.3%, up by 1.6% from March 2022 (22.7%).

In the quarter, petrol and diesel models held 52% of the market, down 0.4% on Q1 2022. Diesel’s market share of 14.5% is down 1.8% on the first three months of 2022, with its 0.8% rise in registrations from January to March 2023 doing little to stop its overall decline.

Plug-in vehicles reached a share of 19.3%, while HEVs took a 25.2% market share. The remaining 3.1% went to the ‘others’ category, including fuel-cell electric vehicles and those powered by natural gas and LPG.

Rollercoaster ride continues

While the big four markets continue to ride the wave of growth as the supply-chain crisis abates, the rollercoaster ride in the seasonally-adjusted annualised rate (SAAR) continued last month.

In France, the SAAR climbed to 1.75 million units from 1.56 million in February. Italy saw the figure rise to 1.55 million from 1.41 million, and in Spain, the SAAR reached 950,000, up from 881,000 in the previous month. Germany, however, saw the SAAR decline, down to 2.79 million units in March from 2.89 million in February. The performance of these big four markets last month means Autovista Group has slightly adjusted its 2023 forecast for the cumulative total of these regions upwards, projecting growth of 9.3% compared to 2022