LMC Automotive European Passenger Car Sales Update (May 2018)

2018/06/07

Summary

  • With an increase of only around 400 units year‐on‐year (YoY), or 0.0% to one decimal place, West European car registrations were virtually unchanged in May. Calendar effects helped the selling rate to increase from 14.4 mn units/year in April to 14.8 mn units/year in May.
  • Spain was once again a success story, with a 7.2% YoY increase in registrations in May, and a selling rate which remains firmly above 1.3 mn units/year. Meanwhile, France’s May sales were little different from the prior year, with a 0.2% YoY gain, but this can be considered a very healthy result, given that there was one fewer selling day in May 2018.
  • The German market fell by 5.8% YoY, but this was unsurprising given that May 2017 was a particularly strong month. Italy also saw a YoY decline in registrations, of 2.8%. In year to date (YTD) terms, the market is 0.3% down on the same period in 2017. The UK experienced a 3.4% YoY increase in sales in May, but remains on course for lower sales in 2018 than in 2017.
  • Our full year forecast for 2018 is 1.7%, marginally below last month’s 1.8%. There are increasing risks to the forecast arising from the upcoming transition to WLTP emissions tests, which could cause significant tax increases in some markets where taxation is linked to CO2 emissions. We will continue to monitor the market for signs of a pull‐forward in sales, which would imply a negative effect once any tax changes are implemented. Much will depend on governments’ policy responses to the implications of the new system, which are in many cases still unknown.



Commentary

 

 There were fewer selling days in May 2018 than a year earlier in Western Europe, including in the key markets of France and Germany. Despite this unfavourable calendar effect, registrations across the region generally held up well, leading to a negligible YoY increase of around 400 units. The selling rate rose from 14.4 mn units/year in April to 14.8 mn units/year in May, and the market is 1.5% up on the first five months of 2017 in YTD terms.

 Despite losing a selling day, France still delivered a YoY increase – albeit a small one – of 0.2%. This solid performance allowed the selling rate to accelerate past 2.3 mn units/year, for only the second time in the last five years. The selling rate has now remained above 2 mn units/year for 10 consecutive months – such a positive run has not been seen since 2010. In Germany, car registrations fell 5.8% YoY, but had to contend with both a high base effect and one fewer selling day than in May 2017. Therefore the selling rate still exceeded 3.5 mn units/year; consolidating a strong start to the year, which sees the market up 2.6% in YTD terms. The UK continues to benefit from a favourable base effect – taxation changes having harmed sales a year ago – helping growth reach 3.4% YoY in May. The selling rate of just over 2.4 mn units/year is in line with the average over the last 12 months, and also matches our full year UK forecast for 2018.

 The Spanish car market remains an important driver for West European growth in 2018, with sales in the YTD 10.6% up on the first five months of 2017. May’s return was a little less spectacular than some recent months, with a 7.2% YoY increase, as registrations to hire companies fell 4.7% YoY. Whilst registrations to individuals continue to increase, businesses still account for more than half of the market. In 2018 thus far, the Italian market has largely matched 2017 in YTD terms, but slipped slightly into negative territory for the first five months of the year due to a 2.8% YoY fall in May. The political uncertainty arising from a new populist government, along with a weaker than expected output in May, has led us to reduce our forecast for the full year to just over 2 mn units, though risks remain on the downside.

Western European Passenger Car Sales Update

Sales (Units) Selling Rate (Units/year)
May
2018
May
2017
Percent
Change
YTD
2018
YTD
2017
Percent
Change
May
2018
YTD
2018
Year
2017
Percent
Change
WESTERN EUROPE
1,310,496
1,310,074
0.0%
6,458,725
6,364,245
1.5%
14,835,019
14,754,261
14,300,005
3.2%
AUSTRIA
32,631
32,497
0.4%
155,250
151,464
2.5%
382,009
358,275
354,174
1.2%
BELGIUM
54,999
51,342
7.1%
275,158
267,183
3.0%
648,767
572,068
546,558
4.7%
DENMARK
22,541
22,291
1.1%
98,216
99,832
-1.6%
241,097
232,725
221,805
4.9%
FINLAND
12,482
11,058
12.9%
57,932
53,582
8.1%
141,315
123,469
118,575
4.1%
FRANCE
191,705
191,415
0.2%
935,959
904,320
3.5%
2,325,457
2,209,988
2,110,751
4.7%
GERMANY
305,057
323,945
-5.8%
1,497,723
1,459,308
2.6%
3,534,807
3,617,435
3,441,266
5.1%
GREECE
13,715
10,596
29.4%
49,505
38,804
27.6%
105,360
115,225
88,298
30.5%
IRELAND
6,080
5,989
1.5%
85,977
89,812
-4.3%
105,428
117,494
131,407
-10.6%
ITALY
199,113
204,879
-2.8%
945,677
948,690
-0.3%
1,950,027
1,996,233
1,970,169
1.3%
LUXEMBOURG
4,915
5,535
-11.2%
24,582
23,740
3.5%
56,146
50,087
52,773
-5.1%
NETHERLANDS
36,952
36,289
1.8%
206,507
185,169
11.5%
454,497
445,949
414,625
7.6%
NORWAY
13,046
14,175
-8.0%
60,900
63,755
-4.5%
154,423
145,309
158,650
-8.4%
PORTUGAL
23,576
23,658
-0.3%
108,287
102,367
5.8%
234,898
243,242
222,123
9.5%
SPAIN
135,522
126,404
7.2%
592,270
535,668
10.6%
1,348,297
1,331,826
1,234,931
7.8%
SWEDEN
37,687
35,325
6.7%
159,299
155,199
2.6%
410,450
390,319
379,255
2.9%
SWITZERLAND
27,826
28,411
-2.1%
126,434
126,995
-0.4%
307,427
310,901
314,028
-1.0%
UK
192,649
186,265
3.4%
1,079,049
1,158,357
-6.8%
2,434,615
2,493,715
2,540,617
-1.8%
Notes:

Greece and Luxembourg: estimates for latest month.
Greece data source has changed to Sales from Registrations.
The percent change in the final column compares the average selling rate in the year‐to‐date with the last full year. The average of the seasonally adjusted selling rate for an entire year is by definition the total of sales in the year.