Western Europe: Vehicle markets stabilize as economic conditions steady

Slow but steady growth seen ahead; More restructuring expected

2013/10/10

Summary

Western Europe Car Sales Forecast
Source: LMC Automotive Global Car
and Truck Forecast, September 2013

 The Western European automobile market is showing signs that unit sales have finally reached bottom. Gradual growth is anticipated over the next few years as general economic conditions are expected to improve. Top executives from several automotive OEMs have also expressed optimism that the Western European market has stabilized. Many companies have reacted by announcing model updates or new introductions in the next few years. Meanwhile, excess capacity is still a problem in the region as some companies are undergoing extensive restructuring to bring it in line with demand.


 LMC Automotive also sees modest potential for growth for cars in the near- and mid-term. The company states, "However, the West European car market (at 11.4 million units) is likely to finish 2013 nearly 3.5 million units lower than 2007 with only a modest improvement likely in 2014." The decline in 2013 equates to a (3.2%)decrease from 2012 results. 2014 is expected to venture into positive territory with a slight growth of just over 1%.

Related Reports:
[IAA, Frankfurt Auto Show 2013 (1): BMW, VW, Daimler, October 2013]
[IAA, Frankfurt Auto Show 2013 (2): European & Asian OEMs, October 2013]
[European OEMs: Germans set sights on new sales record, September 2013]
[VW boosts production in key markets in North America and China, August 2013]
[PSA looks to break its dependence on Europe by expanding into emerging markets, July 2013]
[FIAT lays out strategy to break-even in Europe by 2016, June 2013]
[European OEMs prepare aggressive EV/HV launches, May 2013]
[Renault strives for positive operating margin for the automotive division, May 2013]
[European OEM strategy: cost reduction and expansion beyond the EU, April 2013]



Sales Forecast by LMC Automotive: European economy stabilizes; LMC forecasts slow growth in...

(LMC Automotive, September 2013)

 As of the Q2 2013 forecast, LMC Automotive sees economic indicators that the Eurozone is starting to stabilize. Consumer confidence has also been trending upward in the region. LMC comments, "The Eurozone economy is expected to return to growth in the second half of the year, albeit slowly, which will provide support to the car market." Rapid recovery is not expected because the region is likely to exercise fiscal restraint, despite political pressure to loosen austerity measures. As a result, the full-year sales forecast for cars in Western Europe has been revised. As of August 2013, the expectation is for 11.4 million unit sales, a decline of (3.2%)over the previous year. Slow economic expansion is expected over the next few years. LMC does not anticipate Western European sales to reach the peak level of 16.8 million units that it saw in 2007 through the rest of this decade.

Western European Car Sales in Units by Country (2010- 2016*)

Country 2010 2011 2012 2013 YoY
2012-13
2014 2015 2016 Growth
2013-16
Germany 2,916,260 3,173,634 3,082,502 2,961,389 (3.9%) 3,031,739 3,072,319 3,081,037 4.0%
UK 2,030,846 1,941,252 2,044,589 2,198,727 7.5% 2,238,394 2,259,701 2,296,666 4.5%
France 2,251,786 2,204,628 1,898,769 1,776,414 (6.4%) 1,813,682 1,846,757 1,941,838 9.3%
Italy 1,960,318 1,757,646 1,410,852 1,303,010 (7.6%) 1,282,911 1,378,765 1,591,769 22.2%
Spain 982,019 808,059 692,646 711,427 2.7% 643,479 683,028 776,268 9.1%
Belgium 547,354 572,211 486,732 485,294 (0.3%) 494,907 509,091 513,621 5.8%
Netherlands 483,947 556,089 502,502 371,771 (26.0%) 406,682 456,286 520,981 40.1%
Austria 328,572 356,145 336,010 311,006 (7.4%) 313,851 316,835 319,441 2.7%
Switzerland 290,757 315,680 325,883 297,604 (8.7%) 294,554 293,688 293,578 (1.4%)
Sweden 289,684 304,984 279,479 261,975 (6.3%) 267,286 275,411 290,139 10.8%
Denmark 153,613 170,435 171,267 179,417 4.8% 165,597 159,620 155,837 (13.1%)
Norway 127,754 139,684 137,966 140,645 1.9% 145,793 156,963 163,507 16.3%
Portugal 223,451 153,491 95,367 103,253 8.3% 102,693 107,671 133,548 29.3%
Finland 111,893 126,041 111,170 101,825 (8.4%) 115,753 128,024 148,354 45.7%
Ireland 88,423 89,896 79,498 81,707 2.8% 85,490 91,069 100,965 23.6%
Greece 140,691 97,528 58,296 55,498 (4.8%) 60,940 68,064 80,404 44.9%
Luxembourg 48,989 48,905 48,214 50,194 4.1% 50,916 51,687 52,606 4.8%
West Europe Total 12,976,357 12,816,308 11,761,742 11,391,156 (3.2%) 11,514,667 11,854,979 12,460,559 9.4%
*2013-2016 are forecasted amounts
Source: LMC Automotive "Global Car and Truck Forecast (September 2013)"
(Notes) 1. Numbers in brackets "(  )" represent negative value.
2. Data only indicate figures of small vehicles for personal use and does not include light commercial vehicles.
3. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
4. For more detailed information or inquiries of forecast data, please contact LMC Automotive.

 

Overseas sales volumes contribute to overall health of European automakers

 Despite the continued struggles within the Western European market, most European automakers in the region were able to turn a profit in 2012. Factors that contributed to this were sales outside of Europe, especially in China and the United States, and improvements in production efficiencies. The lone Western European-based carmaker to lose money was PSA Peugeot Citroen, which is moving to shift a higher percentage of its sales overseas, particularly to emerging markets. Fiat-Chrysler and Renault-Nissan were able to realize a profit due to the strength of their sales from overseas alliance partners. VW and BMW earned record profits while Daimler also had a very profitable year.

 

US carmakers show restructuring progress

 US automakers GM and Ford are currently restructuring their respective European operations. This includes eliminating excess capacity, cutting costs, and investing in new products. Both companies are showing good progress and reported smaller-than-expected losses in the second quarter of 2013. GM is on pace to meet its goal of "slightly" better results over the previous year's loss. In July 2013, Ford announced that it expects to turn a full-year profit in 2015.

 

Asian automakers show mixed results

 Meanwhile, most Japanese automakers had previously initiated restructuring plans over the past few years. These companies improved their cost structures and reorganized operations to improve efficiencies. Toyota's European automotive operations returned to profitability for the first time in six years for the fiscal year ending March 2013. Mazda restructured its business when the yen was 100 to the euro. Now at 130 yen to the euro, Europe is contributing significantly to the company's bottom line. On the other hand, Honda had targeted 2013 or 2014 for European profitability. It updated this goal in March 2013, saying that it expects to be profitable by 2016.


 In September 2013, Korea based Hyundai said that the company is marginally profitable in Europe. It has delayed its mid-term goal of increasing market share from 3.5 to 5 percent to the end of the decade instead of by 2015.

 

Several executives express guarded optimism about the future

 Several executives have come out in recent weeks with comments indicating that the Western European automotive market has finally hit bottom. However, slow long-term growth is predicted to come. Below are reflections on the market from leading vehicle executives.

General Motors CEO Dan Akerson spoke about seeing "green shoots" in Europe.
Karl-Thomas Neumann, head of GM Europe, believes the market has reached the bottom and sees, "light at the end of the tunnel."
Ford of Europe CEO Stephen Odell says that "it does feel like it's running at the bottom". However, he also feels that getting back to pre-recession sales levels will take years.
Roelant de Waard, Ford of Europe's head of sales and marketing believes "the worst is over" but added that it's too early to tell if the market is heading up, even though the outlook has improved.
PSA CEO Philippe Varin is expecting a slight positive growth in Europe in 2014. "The worst is behind us," he said.
Alfredo Altavilla, Fiat's chief operating officer for Europe, Middle East and African regions, believes that the trend is toward stabilization, but that "it's too soon to say that it's picking up."
Didier Leroy, CEO of Toyota Europe said of the company's prospects, "It's real sustainable growth."
Trevor Man, Nissan Motor Co.'s executive vice president thinks optimism is justified but "the recovery generally will be slow."
Mazda's head of Europe, Jeff Guyton feels the company is in a good position in Europe. "Business has turned around," he said.

 

Germany and the UK show signs of Improvement; Other top markets still struggling

Car Sales: Top Western European Markets
Source: LMC Automotive Global Car
and Truck Forecast, September 2013

 On a country by country basis, the German economy is expected to continue moderate expansion for 2013-2014. Unemployment remains low for the country at under 7% and household balance sheets are strong. However, buyers remain cautious, leading to relatively flat sales growth expected through 2016. Meanwhile the UK has shown consistent sales gains since 2012, when consumer spending began to recover. Wage rate growth and low inflation are contributing to stronger purchasing power, thereby increasing consumer spending on vehicles.


 In the other top markets in Western Europe, high unemployment continues to drag down overall spending. Italy and France are struggling with high unemployment, thereby impacting consumer spending. As a result, car sales in these countries are expected to remain stagnant in 2014, then slightly improve over the long-term as fiscal and wage restraints slowly relax. Despite Spain's unemployment rate hovering near 28%, the country is expected to see moderate vehicle sales growth in 2013. Much of this is due to incentives from a government car scrapping scheme.

 

 



Excess capacity forces plant closures; Some OEMs look toward export markets

 Several OEMs have started to address overcapacity problems in their Western European operations. In particular General Motors, Ford Motor, Volvo, and PSA announced plans to shut down vehicle manufacturing plants in Western Europe by the end of 2014. This is in addition to earlier closures of an Opel factory in Antwerp, Belgium, and a Fiat plant in Termini Imerese, Italy. Although this is expected to remove capacity, LMC Automotive believes more has to be done to bring capacity utilization to an acceptable level.

Selected announcements for restructurings and plant closings in Western Europe

Company Announcement
General Motors
(Opel)
Antwerp, Belgium: General Motors shut its Opel car assembly plant in Antwerp at the end of 2010. The Antwerp car plant employed 7,000 at its peak and manufactured the Opel/Vauxhall Astra. About 2,600 were employed at the plant in the beginning of 2010.
Bochum, Germany: Opel plans to close the Bochum plant at the end of 2014. Production of the Zafira minivan will be transferred to Russelsheim which currently produces the Astra. Starting in 2015, the next-generation Astra will be built at Opel's Gliwice plant in Poland, and at its Ellesmere Port plant in England. The next-generation Astra will add 700 jobs at Ellesmere Port and guarantees an output of at least 160,000 cars per year.
Ford Motor Dagenham, UK: Ford's facility actions include the closure of stamping and tooling operations in Dagenham in 2013. The Southampton and Dagenham, UK facilities together employed approximately 1,400 hourly and salaried employees.
Genk, Belgium: Ford plans to close the Genk Plant in Belgium and discontinue vehicle production at the plant by the end of 2014, resulting in a reduction of approximately 4,300 positions. Production of the next-generation Mondeo, S-MAX and Galaxy models could be transferred to the Valencia Plant in Spain.
Southampton, UK: The last Transit at the Southampton Plant in the UK went into production on July 15, 2013 and rolled of the production line on July 26. Production of the Transit will be consolidated to the Kocaeli Plant in Turkey.
Fiat Termini Imerese, Italy: Fiat has closed its Sicilian plant that made the Lancia Ypsilon at the end of 2011. The plant employed approximately 1,600 workers.
PSA Aulnay, France: PSA Peugeot-Citroen announced on August 30, 2013 that it will halt production of the Citroen C3 at its Aulnay plant in early November. Some parts production will continue on-site beyond that date. The plant employed 3,000 workers. C3 production will be transferred to Poissy.
Meudon, France: PSA announced in May 2013 that it will close the R&D center in the Paris suburb of Meudon-la-Foret as part of a program to reduce spending. Most of the 660 employees will be transferred to the company's main R&D facility nearby at Velizy. Some will be offered jobs at PSA's assembly plant at Poissy, west of Paris.
Rennes, France: In July 2012, PSA announced a business improvement plan to cut 1,400 workers out of 5,600 at the Rennes plant in the western part of France. The Rennes plant builds the Peugeot 508, Citroen C5 and C6 and will cut employees due to declining sales of large-sized sedans.
Volvo Uddevalla, Sweden: The last Volvo C70 convertible rolled off the production line at the Uddevalla plant in Sweden in June 2013. This JV between Volvo Car Corporation and Pininfarina S.p.A. produced less than 10,000 units in 2011.
Honda Swindon, UK: In March 2013, Honda reduced production shifts from 2 to 1 at the Swindon plant. Honda announced last January that it would cut 800 employees at the plant by the second quarter of this year due to the low demand in Europe.

 

Keeping factories running to reduce overcapacity

 Meanwhile, some companies are looking to export markets to improve factory utilization. Specifically, German luxury brands Mercedes and BMW managed to keep relatively stable production volumes during the recession. As LMC states, "With weak demand at home, OEMs are turning to exports to support Europe's production footprint and it is this that has contributed to recent output improvements, with some premium OEMs announcing shorter summer shutdowns to largely support export demand." In particular, strong markets in the US and China have contributed to this demand.


 Other European carmakers have announced plans to allocate available capacity toward the production of upscale brands. For example, Fiat plans to add upscale models from Maserati and Alfa Romeo to fill under-used factories. The company is targeting an increase to global unit sales for Alfa Romeo to over 300,000 units by 2016 (compared to 101,000 units sold in 2012). It also wants to increase global unit sales for Maserati to 50,000 units per year by 2015 (over an eightfold increase compared to 6,000 units sold in 2012). Fiat is counting on overseas demand for higher-margin luxury cars to keep workers at under-used Italian factories busy. However, it remains to be seen if the company will reach such aggressive targets. Please refer to the MarkLines report, "FIAT lays out strategy to break-even in Europe by 2016" (June 2013) for more information.


 Volkswagen has also looked among its plants to optimize utilization. The company had planned to shut its Brussels, Belgium plant in 2009, but premium brand Audi took over the plant to make its A1 model starting in 2010. In 2011, Audi helped alleviate capacity problems with VW subsidiary, SEAT, by producing its Q3 compact-premium SUV at the Martorell, Spain plant.

 

Alfa Romeo 4C
Alfa Romeo 4C
Nissan Micra
Nissan Micra


 Also, some volume manufacturers are shifting production to Europe as the region becomes more price-competitive. Renault said that it will produce the next-generation Nissan Micra minicar for its alliance partner in Flins, France. This came after reaching concessions with trade unions. The European version of the Micra is currently built the Oragadam (Chennai), plant in India. In 2014, General Motors will build its Opel/Vauxhall Mokka small SUV for Europe in Zaragoza, Spain, rather than importing it from South Korea. Finding new ways to increase factory utilization in Europe could help to address overcapacity that has persisted in the region as individual countries prop up their respective automotive industries.

 

Plant Investments and expansions in Western Europe

European Based OEMs
Company Investment
VW Crewe, UK: In July 2013, Bentley said that it will start production of the company's first SUV model at its main plant in Crewe, in northwestern England. The new SUV will be the fourth model line of Bentley scheduled for release in 2016. To prepare for this production, Bentley will invest GBP 800 million over the next three years. The plant is expected to create more than 1,000 new jobs.
Ingolstadt and Neckarsulm, Germany: In February 2013, Audi announced it will further expand production at its two German factories starting March 2013. It plans to add a total of 12 special production shifts at Ingolstadt and Neckarsulm to process orders for vehicles such as the A6 sedan, A7 coupe and Q5 SUV.
Leipzig, Germany: Porsche invested approximately EUR 500 million to build a car body shop and a paint shop for the Macan. Porsche announced in July 2013 that the paint shop had been completed. The first Porsche Macan small SUV will roll off the production line in December 2013. Production of the Macan will create 1,400 new jobs in the region.
Pamplona, Spain: Volkswagen said in January 2013 that it will invest EUR 785 million in its Pamplona plant over the next five years. A large part of the investment will prepare for manufacturing the next generation of the Polo and its future replacement. The Volkswagen plant in Pamplona has a production capacity of 1,400 cars per day and employs 4,600 people.
Stuttgart, Germany: In September 2013, Porsche announced that it will invest more than EUR 700 million (USD 923.8 million) in the plant at Stuttgart over the next five years. Porsche makes the 911, Boxster and Cayman models at the factory.
Fiat Melfi, Italy. In July 2013, Fiat-Chrysler announced plans to build up to 280,000 small SUVs per year in Italy for the Fiat and Jeep brands. Production will start in June 2014 with a yet-unnamed Jeep variant followed three months later by the Fiat 500X. The planned annual volume for the Jeep will reach 150,000 units while Fiat's version will account for 130,000. Fiat plans to invest more than EUR 1 billion to add these small SUVs to its plant in Melfi, Italy.
Mirafiori, Turin, Italy: Fiat plans to invest just under EUR 1 billion to retool the Mirafiori plant to produce a Maserati SUV by the end of 2014. The Turin Mirafiori factory produces premium vehicles for export to the US and Asian markets.
Fiat and PSA Val di Sangro Plant, Sevel S.p.A.: Fiat SpA and PSA Peugeot Citroen were reported in July 2013 to share an investment in the development of new delivery vans to be produced in Italy. Fiat will invest EUR 550 million, while PSA will invest EUR 150 million to develop the 4th generation of the large Fiat Ducato, Peugeot Boxer and Citroen Jumper models.

 

North American Based OEMs
Company Investment
General Motors
(Opel)
Kaiserslautern, Germany: Opel announced in September 2013 that it will invest EUR 130 million (USD 175.4 million) for new tools and machinery at its engine and parts plant.
Russelsheim, Germany: GM announced on April 24, 2013 that it will invest EUR 230 million for new testing facilities at its European Product Development Center at Opel headquarters in Russelsheim, and at the proving ground in Dudenhofen. The investment will take place over the next three to four years.
Zaragoza, Spain: Opel announced that it would transfer production of the Mokka compact SUV to the Zaragoza plant in Spain in the second half of 2014. Opel will initially invest USD 80 million in the Zaragoza plant, which will assemble CKD kits that are imported from the Bupyeong plant in Korea, with a plan to gradually increase the local-content ratio.
Ford Motor Bordeaux, France: Ford announced on May 24, 2013 that it will retain 1,000 jobs at a transmissions plant in Blanquefort, southwest France after striking a deal with local authorities there. Ford will invest EUR 125 million and local authorities will invest EUR 12.5 million to produce a next-generation transmission for compact cars in Europe, in exchange for guarantees to retain workers for five years.
Cologne (Koln), Germany: On September 5, 2013, Ford announced that it will double the output of its 1.0-liter EcoBoost engine to more than 1,000 engines a day. This is to meet European demand for the B-MAX compact multi-activity vehicle. The annual production capacity at the Cologne plant will be increased from 100,000 engines to 165,000 engines in 2013, and to 200,000 engines in 2014.

 

Asian Based OEMs
Company Investment
Toyota Valenciennes, France- On May 16, 2013, Toyota marked the start of production of its Yaris compact car for North American market at the Valenciennes plant in France. Annual export volume will be around 25,000 units . An additional EUR 10 million has been invested by TMMF to build the Yaris to the specific requirements of the new export market.
Nissan Barcelona, Spain: The Nissan e-NV200 will be manufactured in the Zona Franca in Barcelona from mid-2014 with an investment of EUR 100 million and will create over 700 new jobs. Additionally, Nissan is investing EUR 14 million to increase the annual production capacity of the 1-Ton Pickup and EUR 6 million for the assembly of the gearbox for the Nissan LEAF and Nissan e-NV200 at the Barcelona plant.
Sunderland, UK: Approval has been granted in September 2013 to expand the Sunderland plant for Infiniti to manufacture its first ever vehicle built in Europe. This extension forms part of the previously announced GBP 250 million investment by Infiniti which will create over 1,000 new jobs in the UK automotive industry. The Infiniti Q30 will be built in 2015. When production begins, Infiniti will become the first new car brand to be manufactured in the UK on this scale in 23 years.
Tata (Jaguar
Land Rover)
Solihull, UK: According to reports from July 2013, Jaguar Land Rover is planning a new family of entry-level luxury vehicles which will start with a compact saloon in 2015 and include a crossover SUV and estate model. The vehicles will be made on production lines under construction at its Solihull plant, creating around 1,500 new jobs. The new investment will be paid for by a portion of JLR's increased annual GBP 2.75 billion capital expenditure budget.
Wolverhampton, UK: Jaguar Land Rover announced in March 2013 that it will increase its investment in its new Engine Manufacturing Centre to more than GBP 500 million, creating 1,400 new jobs. The plant will manufacture a new generation of technologically advanced, lightweight, 4-cylinder, low emission diesel and petrol engines. The first engines are expected to come off the production line in 2015.

 

 



Long-term production trend for the region is down; German production in positive territory

 Looking at the production trends for Western Europe over the period from 2007-2012, the German automobile manufacturers were the only companies to increase production over this period. The strength of exports to overseas markets, and the ability of some premium brands to capture market share from volume producers in Western Europe, contributed to this trend.


 Among the other major regional manufacturers, Renault-Nissan, PSA, GM (Opel), Fiat-Chrysler, and Ford Europe all showed double-digit losses during this period as these companies struggled to close plants and reduce shifts. Production was still shrinking for these companies over the 2011-12 timeframe, continuing through the first seven months of 2013. Japanese automakers Honda and Toyota have shown healthy upticks in production in 2011-12.

Western European Production 2007-2012

OEM
Group
2007 2008 2009 2010 2011 2012 YoY
2011
-12
2007-
2012
Jan-Jul
2012
Jan-Jul
2013
YoY
Jan-
Jul
2012
-13
Porsche 80,511 96,576 76,375 97,017 126,099 146,144 15.9% 81.5% 91,060 83,925 (7.8%)
Volkswagen 2,913,044 2,948,633 2,623,627 3,106,846 3,499,919 3,273,217 (6.5%) 12.4% 2,016,677 1,964,827 (2.6%)
Daimler 1,201,543 1,199,946 944,840 1,293,249 1,289,275 1,259,962 (2.3%) 4.9% 747,053 751,230 0.6%
BMW 1,331,417 1,215,040 1,086,605 1,201,720 1,382,963 1,364,882 (1.3%) 2.5% 805,327 671,132 (16.7%)
Renault-Nissan 1,835,555 1,521,640 1,296,032 1,504,055 1,581,250 1,473,720 (6.8%) (19.7%) 885,897 824,250 (7.0%)
PSA 2,361,420 2,075,137 1,719,250 2,109,510 2,002,184 1,705,150 (14.8%) (27.8%) 1,082,042 879,990 (18.7%)
Honda 237,772 230,423 75,583 139,278 109,700 165,630 51.0% (30.3%) 98,824 85,396 (13.6%)
Toyota 544,603 451,331 336,589 295,566 277,129 314,202 13.4% (42.3%) 179,027 198,927 11.1%
GM (Opel) 1,567,367 1,295,427 993,410 975,543 990,009 811,446 (18.0%) (48.2%) 524,923 480,703 (8.4%)
Fiat-Chrysler 1,216,195 911,473 765,069 673,707 624,372 529,580 (15.2%) (56.5%) 338,999 300,341 (11.4%)
Ford Europe 2,313,727 1,842,666 1,487,024 1,536,617 1,186,234 946,247 (20.2%) (59.1%) 620,025 513,695 (17.1%)
Mitsubishi 66,653 62,053 48,718 50,533 46,195 24,571 (46.8%) (63.1%) 18,020 0 (100.0%)
Other Groups 44,676 27,244 13,759 53,275 29,916 7,282 (75.7%) (83.7%) 2,083 2,747 31.9%
Isuzu 1,674 1,284 192 0 0 0 0.0% (100.0%) 0 0 0.0%
Mazda 14,235 0 0 0 0 0 0.0% (100.0%) 0 0 0.0%
Proton 2,630 2,106 1,618 2,613 0 0 0.0% (100.0%) 0 0 0.0%
Suzuki 6,692 3,163 549 0 0 0 0.0% (100.0%) 0 0 0.0%
Volvo Trucks 4,439 5,271 3,405 0 0 0 0.0% (100.0%) 0 0 0.0%
Geely (Volvo) 0 0 0 0 418,616 423,700 1.2% 237,959 195,792 (17.7%)
Tata (Jaguar, Land Rover) 0 261,243 158,446 241,452 288,412 361,383 25.3% 215,967 248,102 14.9%
Total 15,744,153 14,150,656 11,631,091 13,280,981 13,852,273 12,807,116 (7.5%) (18.7%) 7,863,883 7,201,057 (8.4%)

(Notes) Numbers in brackets "(  )" represent negative value.
Source: MarkLines and various sources.

 

 



New product introductions lead to rise in demand for premium brands

 Premium automakers have been less impacted by the recession due to their global presence and their ability to export to strong luxury markets such as the US and China. This has allowed these companies to invest in the development of new products during the downturn.

Global sales for selected European premium brands

Maker/Brand 2004 2005 2006 2007 2008 2009 2010 2011 2012
Mercedes 1,087,636 1,097,067 1,158,459 1,262,638 1,181,297 1,023,809 1,163,248 1,279,643 1,341,532
BMW 931,251 1,028,037 1,078,190 1,184,236 1,101,944 950,722 1,069,153 1,231,176 1,332,543
Audi 710,681 761,250 823,471 920,200 932,560 925,476 1,044,478 1,209,036 1,351,509
Volvo 407,448 390,859 375,124 434,740 350,617 314,592 345,255 403,279 374,135
Land Rover 136,077 155,519 156,019 190,709 146,757 112,497 139,155 171,478 222,135
Alfa Romeo 153,845 128,032 142,061 151,835 106,230 114,309 113,359 134,979 97,801
Porsche 75,672 82,169 85,221 92,594 72,893 61,734 76,333 91,325 104,563
Jaguar 111,764 82,521 68,547 56,998 60,334 47,036 46,724 42,194 43,139
Source:  MarkLines and various industry sources. Data included cars and light truck sales for most major markets.
Data may vary from other parts of this report due to differences in data sources.


 Sales for the German premium brands have been particularly resilient with Mercedes, BMW, Audi and Porsche all showing sustained growth since the lows experienced in 2009. Tata's brands are showing mixed results with Land Rover almost doubling sales since 2009, while Jaguar is slowly building volumes. Volvo showed a slight setback in 2012 but is showing signs of life under Geely. Of the major premium European brands, Alfa Romeo showed a significant drop from 2011-2012 but has aggressive plans to triple global sales by 2016 with the release of new products like the 4C.


 Several upscale OEMs are also looking to new segments to expand their product offerings. Many of these companies plan to introduce crossovers / SUVs to their product portfolios. They are attempting to combine performance, luxury, and utility in a bid to win buyers away from volume brands. These vehicles will have multiple price points and various sizes.

 

Examples of future SUV / crossovers and other vehicle introductions

Audi is overhauling its existing crossovers starting with the large Q7 in 2014. It will be followed by the Q5 in 2016 and the redesigned Q3 in 2018. However, the Q8, a sporty version of the Q7, is expected in 2015 and the Q6 is expected in 2016-2017. The company is planning further SUV additions but hasn't released details yet.
Mercedes-Benz has indicated a goal of introducing 13 new models, including several crossovers by 2020. Notable are the GLA, which goes on sale in Europe next spring and will later be shipped to North America and China, and two more SUVs, the MLC in 2015 and the GLC in 2016.
BMW also plans to expand its crossover offerings. The X4 concept that was shown in Shanghai is scheduled to go on sale in 2014. The company is also looking at the compact two-door X2 crossover in 2016 and the X7, a four-door vehicle that may be released in 2018-2019. Other offerings include the i3 battery electric vehicle due out in November 2013, and the new 4-series coupe/convertible. BMW may also introduce a Rolls-Royce crossover as a sibling to the X7.
Porsche is expanding its lineup with the 918 Spyder hybrid supercar (USD 845,000) displayed at the Frankfurt show. It also plans to release the Macan, a compact SUV in early 2014. Furthermore, the company is considering adding a smaller version of the Panamera and a USD 250,000 sports car. Porsche hopes to sell more than 200,000 vehicles per year in 2015 or 2016.
Fiat plans to build eight new Alfas and six Maseratis in Italy by 2016. It will release the Maserati Ghibli and the new Alfa Romeo 4C sports car this year. The Levante SUV is crucial to help Maserati boost deliveries eightfold to 50,000 cars in 2015.
Renault recently introduced its "Initiale Paris" line at the Frankfurt motor show. This is part of Renault's plan to move its larger cars into a premium segment, but keep these vehicles more affordable than other German luxury brands.
Jaguar is planning eight new or refreshed products for 2013 including the Jaguar F-Type and the world's first nine-speed gearbox in its Land Rover product line-up. It is also looking at adding a luxury SUV crossover with the C-X17 concept.
Lexus is expected to produce its first compact crossover, the LF-NX in late 2014 or in 2015.
Infiniti's Q30 concept crossover (which shares components with the Mercedes GLA) could be built as early as 2015 at Nissan's Sunderland plant in Britain. This is the first of five new vehicles to be added to the brand for global markets by 2020.

 

Mercedes GLA
Mercedes GLA
Jaguar C-X17 Concept
Jaguar C-X17 Concept
Lexis LF-NX Concept
Lexus LF-NX Concept
BMW i3
BMW i3

 

Volume brands also planning several model introductions in coming years.

 Several traditional volume manufacturers see long term potential in Western Europe. To prepare for this growth, many companies are preparing a barrage of new models and updates in the coming years.

Volkswagen is making a major push in electric and hybrid vehicles with as many as 40 options. The company boasts that it will produce 14 alternative powertrain vehicles by the end of 2014. The e-Up! electric and a battery powered e-Golf are among the new options. VW's Golf Sportsvan concept is likely to replace the Golf Plus compact minivan in mid-2014.
Volkswagen will also release a wagon under the SEAT brand called the Leon ST (Sport Tourer) that will go on sale in November 2013. The Skoda brand will get the Rapid Spaceback hatchback in October 2013.
Fiat introduced a new seven-seat version of its 500L called the Living and an SUV crossover, the 500L Trekking, at the 2013 Frankfurt auto show.
Renault showed recent concepts of its Espace minivan and Twingo mini-car. New versions of these models are expected to be released in 2014. The Espace will be the first to bear the Initiale Paris badge that will be used on future upscale Renaults.
Citroen is expected to launch in mid-2014, a production version of the C4 Cactus concept car that was shown in Frankfurt. It is positioned against brands such as Chevrolet and Skoda.
Peugeot's new 308, which is built on the new EMP2 platform, is lighter and emits less emissions than its previous version.
General Motors announced on April 10 that it would invest EUR 4 billion in Europe through 2016 mainly to support its European unit Opel. With GM's support, Opel plans to introduce 23 new models and 13 new powertrains through 2016. Key among them is the new Opel Astra, which is due in late 2015, and a redesigned Opel Antara SUV due in 2016.
Ford recently announced that at least 25 new Ford models will be introduced in Europe over the next five years. This is 10 more models than Ford originally announced in October of 2012. The S-Max, which is expected to be released in 2014, will be important to the company's success.
Toyota is launching its Auris Touring Sports wagon, adopting a body style that is popular with Europeans.
Honda will introduce the Civic Tourer wagon, which was designed and developed in Europe and will be released in early 2014. It features a rear adaptive suspension for a sporty ride.
Suzuki's iV-4 concept is a new subcompact SUV positioned below the SX4 S-Cross. It will likely launch in spring 2015.
Hyundai plans 22 new and updated models in Europe by 2017. Most will be updated replacements, like the next generation i10 minicar. There may also be a new subcompact SUV as early as 2016.

 

Ford S-Max Concept
Ford S-Max Concept
Citroen c4 Cactus Concept
Citroen c4 Cactus Concept
Honda Civic Tourer Wagon
Honda Civic Tourer Wagon
Volkswagen e-Golf
Volkswagen e-Golf

<Automotive Industry Portal MarkLines>