LMC Automotive European Passenger Car Sales Update (September 2018)

2018/10/10

Summary

  • West European car registrations fell by 23% year‐on‐year (YoY) in September, with WLTP continuing to exert a distorting force on the region following August’s inflated sales. The regional selling rate slipped to 11.3 mn units/year in September, from the record high of 18.4 mn units/year in August.
  • French car registrations were down 12.8% YoY, but sales for the year‐to‐date (YTD) are still up 6.5%. In Spain, sales fell by 17% YoY in September, with the selling rate declining to 1.1 mn units/year, from 1.9 mn units/year in August, which had been an all‐time high.
  • The Italian market contracted by 25.4% YoY in September, with the selling rate tumbling below 1.6 mn units/year for the first time in almost three years. Germany saw an even larger percentage YoY decrease in September, as sales fell by 30.5%. Despite this, the German market has still grown 2.4% in the YTD. UK car sales declined by 20.5% YoY, a loss of 87,000 units in YoY terms, further compounding a difficult year for the market (‐7.5% YTD).
  • Overall, the expected fall in sales due to WLTP‐related distortion did materialise in September, although the impact was far from uniform across the region. Following growth of 1.4% in 2018, we see 2019 growth at 0.8%, as several key markets approach their cyclical peaks.



Commentary

 West European sales fell by 23% YoY in September, with the selling rate also significantly down, at 11.3 mn units/year, compared to the distorted 18.4 mn units/year in August. September saw the downside to August’s pull‐forward effect, as WLTP emissions regulations were widely implemented from 1st September. Perhaps equally significant, the transition to WLTP also led to the unavailability of some models that had not received approval under the new procedure, while the fact that there was one fewer selling day in September 2018 than in September 2017 across the region did not help sales either.

 In Germany, registrations fell 30.5% YoY, which sent the selling rate below 2.5 mn units/year. However, due to the one‐off effects of WLTP, it makes more sense to look at Q3 as a whole, in which sales actually grew 1.2% YoY. As some of the WLTP testing backlogs clear, we expect sales to pick up towards the end of the year, leaving the market at around 3.5 mn units. In some other markets, the extent of the decline in September was not as severe as it could have been given the exceptionally strong August. In France, September’s 12.8% YoY fall still resulted in a 7.6% YoY gain when the months of August and September are taken together; a September selling rate of 1.9 mn units/year seems respectable in these circumstances. Similarly, the Spanish car market was down 17% YoY in September, but the average selling rate for the year still stands at 1.4 mn units/year, and healthy growth for the year as a whole still looks to be a safe bet.

 Of more concern is the Italian market, which fell 25.4% YoY in September. The level of the slowdown was surprising, given the rather muted pull‐forward effect in August ahead of the WLTP deadline, which we attributed to the fact that taxes are not linked to CO2 emissions in Italy. For August and September combined, registrations were down 13.8% YoY, which suggests underlying demand concerns in addition to supply issues with the availability of some models. September is one of the most important months of the year for the UK market, as new registration plates lead to a surge in sales, which means that the current disruption to supply of some models – along with generally anaemic consumer confidence – is ill‐timed. Sales fell 20.5% YoY, with the selling rate dropping to 2 mn units/year.

Western European Passenger Car Sales Update


Sales (Units) Selling Rate (Units/year)
Sep
2018
Sep
2017
Percent
Change
YTD
2018
YTD
2017
Percent
Change
Sep
2018
YTD
2018
Year
2017
Percent
Change
WESTERN EUROPE
1,049,521
1,363,793
-23.0%
11,188,697
11,032,520
1.4%
11,262,535
14,795,624
14,299,867
3.5%
AUSTRIA
17,205
29,622
-41.9%
276,465
270,551
2.2%
211,418
358,199
354,174
1.1%
BELGIUM
27,145
40,895
-33.6%
455,722
435,341
4.7%
338,010
597,390
546,558
9.3%
DENMARK
12,040
14,376
-16.2%
169,899
168,688
0.7%
161,346
224,713
221,797
1.3%
FINLAND
6,528
9,118
-28.4%
97,695
92,088
6.1%
85,491
124,913
118,575
5.3%
FRANCE
148,752
170,649
-12.8%
1,662,720
1,560,874
6.5%
1,869,911
2,282,049
2,110,751
8.1%
GERMANY
200,134
288,094
-30.5%
2,673,418
2,611,836
2.4%
2,451,713
3,552,466
3,441,266
3.2%
GREECE
6,543
6,278
4.2%
82,722
68,029
21.6%
99,313
109,033
88,298
23.5%
IRELAND
3,201
3,897
-17.9%
123,099
128,548
-4.2%
95,743
114,843
131,340
-12.6%
ITALY
124,976
167,469
-25.4%
1,490,257
1,534,022
-2.9%
1,579,567
1,945,646
1,970,243
-1.2%
LUXEMBOURG
2,596
3,968
-34.6%
42,365
40,872
3.7%
37,630
54,894
52,773
4.0%
NETHERLANDS
29,527
35,430
-16.7%
359,581
322,931
11.3%
378,941
492,601
414,538
18.8%
NORWAY
10,620
13,484
-21.2%
111,500
116,358
-4.2%
129,467
149,320
158,650
-5.9%
PORTUGAL
12,771
14,857
-14.0%
182,677
171,552
6.5%
199,240
235,659
222,129
6.1%
SPAIN
69,129
83,287
-17.0%
1,042,643
933,097
11.7%
1,097,818
1,377,530
1,234,875
11.6%
SWEDEN
19,111
31,679
-39.7%
281,828
279,839
0.7%
233,060
370,048
379,255
-2.4%
SWITZERLAND
20,409
24,520
-16.8%
225,286
231,483
-2.7%
275,907
306,315
314,028
-2.5%
UK
338,834
426,170
-20.5%
1,910,820
2,066,411
-7.5%
2,017,960
2,500,007
2,540,617
-1.6%
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.