New-car Sales in Europe Show Signs of Recovery: ARTC

Europe is one of the most important hubs for the global automotive industry and a region that is home to many internationally reputed automakers. However, the global recession and the European sovereignty debt crisis have led to economic stagnation in the region since 2009. According to Eurostat, the statistical office of the European Union (EU), the EU economy shrank by 6% in 2012 and the office forecasts negative growth in 2013 and 2014 as well. The weak economy has also sunk demand for new cars in Europe.

The Automotive Research & Testing Center (ARTC), a transportation vehicle R&D and testing hub in Taiwan, recently publicized a detailed study on the EU automobile market. The center concludes that the automotive market in the region will begin to grow in the second half of 2013.

In recent years, ARTC says, new-car sales in the EU (27 nations) were between 17 million and 21 million units. In 2012, the volume dropped 5.7% from previous year to about 17.89 million units, while in the first half of 2013, demand continued to trend down. The center forecasts that EU auto sales in 2013 will amount to only about 17 million units, while new-car production in the region will be about 19 million.

Statistics compiled by ARTC show that in the first half year of 2013, some 8.93 million new cars were sold in Europe, including about 6.21 million new cars registered in the EU, a 5.6% decrease from the same period of last year. The top-five national auto markets in the region—Germany, Russia, the U.K., France and Italy—together accounted for 69% of the new-car shipments. From January to June, nearly all of the major markets shrank year-on-year (YoY): Spain by 4.9% Germany by 8.1%, Italy by 10.3% and France by 11.2%.

Only the U.K. bucked the trend, posting a 10.0% gain in the comparison period. A series of stimulus measures in the country helped to boost sales in the first half to 1.32 million units.

In Germany, the largest automobile market in Europe, Volkswagen (VW) was the most popular brand, winning 21.5% of the market in the first half of this year.

Russia has been a focal market for global automakers in recent years. After continued rapid growth in the past three years, some 1.33 million new cars were sold in the market during the first half, down 5.7% YoY. Russian auto brand Lada is currently the biggest name in the market, with a 17% share.

Major Production Base

Europe has been a major global automobile production base, accounts for 25% to 30% of the global new-car supply. However, falling sales at home and increasing overseas production by major brands (such as Volkswagen and BMW in China) pushed the global share of European-made cars down from about 32% in 2005 to 28% in 2009 and 24% in 2012.

In the first half, new-car production in Europe declined by 8.6%, including retreats in all of the top-five automobile producing nations in the region: Germany, Russia, Spain, France and the U.K. Auto production plunged by 22% in France in the first six months, compared to 5% losses in the other four countries.

In the first half of 2013, some 2.82 million new cars were produced in Germany, with VW, Audi, Mercedes-Benz, BMW and Ford accounting for the lion's share. Russia and Spain were the second- and third-largest auto producing nations in Europe during the period, turning out 1.04 million units (-3.94% YoY) and 1.02 million units (-1.3%), respectively.

Prospects

Though new-car sales in Europe fell overall in the first half, ARTC says that the U.K. market was bright spot during the period. Quoting statistics compiled by Markit Economics of Europe, ARTC says that the PMI (Purchase Management Index) of the manufacturing sector in Europe has risen to 51.3, a 26-month high, providing a sign of economic recovery, as well as contributing to optimism on new-car sales in the region.

Auto Sales & Production in Europe (2005-2013)
Year	2005	2006	2007	2008	2009	2010	2011	2012	2013(f)
Sales Volume	17.29	18.13	21.06	19.94	17.78	18.12	18.97%	17.89	17
Production Volume	21.19	21.78	23.26	22.09	17.17	19.82	20.82	19.83	18.94
Growth	0.76%	4.86%	16.16%	-5.32%	-10.83%	1.91%	4.69%	-5.69%	-5.00%
Source: ARTC, September 2013