November European new-car market recovery points to a positive end to 2022

20 December 2022

The EU new-car market posted a fourth consecutive month of year-on-year growth in November. The 16.3% gain also surpassed the 12.2% rise recorded in October, which was against an especially low base of comparison.

The latest data released by the European Automobile Manufacturers’ Association (ACEA) show that 829,527 new cars were registered in the EU last month. Registrations in the wider European region increased 17.4% year on year, exceeding one million units.

All five of Europe’s leading new-car markets posted year-on-year gains last month, ranging from 9.8% in France to 31.4% in Germany. November was particularly bolstered by registrations exceeding Autovista24’s expectations for Germany and the UK, which gained 31.4% and 23.5% respectively. The net effect was that the volume of new-car registrations across all five markets, 730,000 units, was almost 50,000 units – or 6.9% – higher than predicted.

Last month’s figures confirm the ongoing recovery of new-car supply, which has been constrained by semiconductor shortages as well as challenges caused by the war in Ukraine and COVID-19 lockdowns in China.

This bodes well for a positive end to the year. Autovista24 has held its 2022 new-car market forecasts for France, Italy, and Spain, as all three markets performed as expected. Meanwhile, the outlooks for Germany and the UK, as well as smaller EU and EFTA markets, have been upgraded.

However, there are signs that the cost-of-living crisis engulfing the region is weakening underlying demand and the year-end fulfilment of orders is pulling registrations forward from 2023. Accordingly, Autovista24 has reduced its European new-car market forecast for next year and beyond.

Germany and the UK strengthened

New-car registrations in Germany jumped 31.4% year on year in November and totalled 260,512 units. This is almost double the 16.8% growth recorded in October. The base of comparison remains low but was especially weak in October 2021 and the seasonally-adjusted annualised rate (SAAR) increased from 2.64 million units in October to 3.08 million last month - the first time it has surpassed three million units in 2022.

The volume of new-car registrations in the country during the first 11 months of the year reached 2.3 million units, a decline of 2.4% compared to the same period last year. However, compared to pre-pandemic 2019, new-car registrations are down 30% in the year-to-date.

Autovista24 has adjusted its 2022 forecast and expects new-car registrations will now only see a comparatively marginal 2.1% fall, to 2.57 million units. Looking further ahead, Autovista24 projects new-car registrations in 2023 to total 2.83 million units, a year-on-year increase of 10.1%.

The recovery of the UK’s new-car market strengthened last month following October’s rebound. Although the 23.5% year-on-year gain in November was slightly weaker than the 26.4% growth in October, it was against a higher base of comparison. Autovista24 calculates that the SAAR improved to 2.08 million units after falling just short of the two-million mark in October.

Autovista24 expects the growth rate in December to be lower than in November, largely because there is one less working day than in December 2021. Nevertheless, the 2022 forecast has been revised upwards to 1.61 million new-car registrations, down 2.1% on 2021.

On one hand, the cost-of-living crisis shows no sign of abating and the outlook for the country’s automotive sector remains uncertain. On the other hand, supply improvements mean Autovista24 has maintained its 13.3% growth outlook for 2023. Given the higher assumed 2022 base, the volume forecast has been upgraded to 1.83 million units, from 1.79 million.

Modest gains in France, Italy, and Spain

The new-car markets of France, Italy, and Spain posted their fourth consecutive month of year-on-year growth in November. While the rates are misleading, set against a low base of comparison due to semiconductor shortages in November 2021, they confirm Autovista24’s expectations for a modest recovery.

A total of 133,961 new cars were registered in France last month, aligning with Autovista24’s forecast of 133,000 units. The year-on-year growth of 9.8% almost doubled the 5.5% upturn in both September and October. Moreover, the base of comparison was higher as the November 2021 contraction in the French new-car market (down 3.2%) was far weaker than in October 2021 (down 30.7%). Accordingly, the SAAR jumped from below 1.5 million units in October to almost 1.68 million.

Autovista24 forecasts that the French new-car market will amount to 1.53 million units in 2022, marking a 7.7% year-on-year decline. The outlook for next year has been subtly reduced to 1.77 million registrations, equating to growth of 15.3%. This is 20.2% lower than the 2.2 million new cars registered in 2019, prior to the COVID-19 pandemic.

With 119,853 new cars registered in Italy last month, the market grew 14.7% year on year. This tally is close to Autovista24’s forecast of 121,000 units, with the growth rate subtly beating the 14.6% gain in October. The base of comparison is low as the Italian market contracted by 24.6% in November 2021, but this was less dramatic than the 35.7% decline in October 2021. So, the SAAR increased to 1.52 million units last month, from 1.43 million units in October.

As November met expectations, the forecast for 2022 has only been subtly adjusted, with fewer than 1.32 million registrations anticipated, equating to a year-on-year decline of 9.8%. Mounting financial pressures mean Autovista24 has slightly reduced its 2023 outlook for Italy to 1.56 million units. At this level, the Italian new-car market would be 18.8% smaller than in 2019.

The 10.3% year-on-year growth of the Spanish new-car market last month was slightly weaker than the 11.7% gain in October but was against a higher base of comparison. This means the SAAR rebounded to 977,000 units, having dipped below 900,000 units in October.

As new-car registrations in November only marginally exceeded Autovista24’s forecast of 72,000 units, the change to the 2022 forecast is negligible. At 820,451 units, this aligns exactly with the view expressed by both Faconauto and ANFAC, marking a year-on-year decline of 4.5%.

Autovista24 has held its 2023 forecast for 975,000 new-car registrations, meaning the Spanish market is not expected to exceed one million units again until 2024.

European outlook downgraded

In the first eleven months of 2022, cumulative new-car registrations in the EU amounted to 8.36 million units, marking a 6.1% downturn. Moreover, compared to the same period in pre-pandemic 2019, the EU new-car market has contracted by 30%.

Autovista24 assumes that new-car supply will continue to ease in December, although this was already factored into last month’s forecasts. The net effect of this month’s changes is that the 2022 outlook for EU new-car registrations has been increased by 68,000 units to 9.18 million units, equating to a year-on-year contraction of 5.4%.

Autovista24 has higher expectations for the EFTA markets and its upgraded UK outlook means the wider European region is forecast to decline by 5% this year, to below 11.2 million new-car registrations.

Although the cost-of-living crisis will reduce order intake, Europe’s new-car market will continue to rely heavily on fulfilling orders placed even before energy costs and inflation started to rise this year. However, with higher deliveries expected in 2022, Autovista24 has lowered its 2023 forecast by 50,000 units. At 12.79 million new-car registrations, this represents 14.3% growth compared to the latest assumption for 2022.

Autovista24 anticipates an ongoing recovery of the continent’s beleaguered automotive sector in the medium and long term but has consistently downgraded the region’s outlook. The volume of new-car registrations in Europe is not expected to return to pre-pandemic levels until the middle of the next decade.