Recovery of Europe’s light-commercial-vehicle market stalled in May

23 June 2022

commercial-vehicle market

Although the year-on-year figures suggest the EU light-commercial vehicle (LCV) market fared slightly better last month than in April, adjusting for working days reveals a stalled result.

The EU LCV market contracted by 22.1% year on year last month, with over 110,000 units registered, according to the latest data from the European Automobile Manufacturers’ Association (ACEA). This appears to be an improvement on the 30.2% year-on-year downturn in April. However, there were two more working days in most EU markets than in May 2021. Accordingly, Autovista24 calculates that the LCV market fell by around 29% last month, following the working-day adjusted 26% downturn in April that hinted at the start of a recovery.

The modest deterioration in the commercial-vehicle figures mirrors the development of  EU new-car registrations last month, as pre-existing semiconductor shortages and additional supply challenges caused by the war in Ukraine continue to impair vehicle deliveries.

Outside of the EU, the downward trend for the UK new light-commercial vehicle market continued for the fifth straight month in May, with registrations falling 25.1% year on year. As this contraction was slightly greater than in the EU, it pulled the Europe-wide fall in LCV registrations last month down to 22.6%, according to ACEA’s figures.

Year-to-date stability

All four major EU LCV markets suffered double-digit year-on-year declines last month. Spain saw the greatest fall, with 10,921 registrations equating to a 32.6% contraction. France and Germany posted respective losses of 19.7% and 23.8%, whereas Italy declined by 13.5%.

These losses are replicated in the year-to-date figures. Italy has fared the best, with 73,217 registrations marking a year-on-year downturn of 8.9% in the first five months of 2022. Germany endured a decline of 19.8% and France a 24.9% drop, but Spain has been hardest hit. With only 46,409 new light-commercial vehicles registered between January and May, the sector has receded by 36.1%.

Austria’s LCV market has suffered the greatest losses so far in 2022, however, contracting by 57.6% compared to the same period last year. Only three EU member states have posted positive results – Cyprus (15.2%), Latvia (6.7%), and Slovakia (0.2%).

Across the EU, 23.2% fewer light-commercial vehicles were registered than in January to May 2021. This represents stability compared to the 23.5% decline in the first four months of the year. The UK has performed slightly below par in the year to date, with 25% fewer LCVs registered than in the same period last year. Accordingly, the overall European market contracted by 23.5% in the first five months of 2022, in line with the 23.8% fall through April.

The market’s fortunes are expected to improve as supply chains recover from the disruption caused by the war in Ukraine. Nevertheless, challenges remain, with rising inflation and high fuel prices adding operational costs, especially in the logistics sector, which will invariably impact new-van sales.

Medium and heavy commercial vehicles return to growth

LCVs, the lion’s share of which are vans, were responsible for the downturn in the wider commercial-vehicle market last month. In fact, medium and heavy commercial vehicles (MHCVs), with a gross vehicle weight (GVW) over 3.5 tonnes, returned to year-on-year growth in May. Overall, commercial-vehicle registrations in the EU declined 17.7% year on year to 136,410 units. Nevertheless, adjusted for working days, the estimated 25% decline was slightly greater than the adjusted 23% downturn in April.

Even factoring in the weakness in the UK, MHCV registrations grew Europe-wide last month. The sector is dominated by heavy trucks, with a gross vehicle weight over 16 tonnes, registrations of which increased 8% year on year during May. However, their year-to-date growth remains negative, albeit with only a 0.6% decline.

Overall, the whole European commercial-vehicle market contracted by 18.5% year on year last month. The year-to-date decline of 20.3% is a subtle improvement on the 20.8% downturn through April. All of Europe’s leading markets have posted declines in the first five months of 2022, with double-digit drops in France, Germany, Spain, and the UK. Italy has performed comparatively well, contracting by 8.2%, but only four small European markets have grown – Cyprus, Latvia, Slovakia, and Iceland.