Bottom line on European car sales:
- The latest April forecast for Western Europe from IHS Automotive posted another robust uplift of 6.7% y/y to 1.12 million units, although this was slightly down on the uplift in the first quarter and brought the YTD increase down to 8.2%.
- However, the overall sales trend is up with the latest SAAR rate forecast at 13.03 million units which is the first time the rate has climbed over 13 million units since March 2011. This is due to ongoing recovery in southern Europe and robust growth being posted in Germany and the UK as the market continues to show signs of a concerted recovery.
- For 2015 IHS Automotive expects passenger car demand in Western Europe to continue to grow, by around 3% y/y to around 12.5 million units. The gains should continue in modest increments until the end of the decade with the level at the end of the decade recovering to 13.5 million units.
THE market in Western Europe has continued to respond positively to the improvement in confidence and macroeconomic indicators across the region although there are still significant risks
These include the ongoing worrying situation regarding the prospect of a Greek default and the geopolitical crises in Ukraine and the Middle East.
German car market
However, the German economy’s ongoing high degree of international competitiveness and persistently robust consumer demand means the passenger car market is showing steady and consistent growth.
In addition to these positive economic factors, passenger car demand in Germany will also continue to be fuelled by high levels of discounting and incentives as OEMs jockey for position and volumes.
New models will also help lift the market. This has already been apparent with the launches of the heavily updated Opel Corsa and new Volkswagen (VW) Passat and Mercedes C-Class.
More are coming, including the new Audi A4 and second-generation VW Tiguan. Forthcoming revisions to the BMW 3-Series range should also boost this perennial favourite’s popularity as it competes against newly replaced rival models.
For the full year 2015, IHS Automotive sees passenger car sales in Germany rising by 3.3% y/y to 3.14 million units, which implies a slowdown from the current rate of growth over the rest of the year.
French car market
After closing the end of the first quarter with a strong performance, the French market has returned to slower rates of growth in April.
In March this is likely to have been down to dealers making a push to meet sales targets though, and the current levels are likely to be a new normal. Indeed, from an economic perspective, while IHS expects France to benefit from lower inflation and a weaker euro, boosting activity during the first half of 2015, growth overall is expected to be modest for the year as a whole as the economy remains under pressure. Private consumption, France’s traditional growth engine, will be hit by weak nominal wage growth, although low inflation helped by a reduced oil price should help to sustain households’ purchasing power.
