Europe wide car sales up 16 percent in December

Various government backed scrappage schemes are continuing to distort the European new car market, inflating sales for car makers dominant in the UK and France while penalizing those dependent on demand in the German market.

New-car registrations in the EU and European Free-Trade Association (EFTA) jumped 16 percent in December as figures got a near 50 percent boost in France while gaining almost 40 percent in the UK, according to data from the ACEA (Association des Constructeurs Européens d’Automobiles – European Automobile Manufacturers Association) However, total sales for the whole of 2009 were down 1.6% on 2008 as a total of 14.5 million cars were sold across 28 European countries in 2009.

Some countries with scrappage schemes did see rises in sales for 2009, including France and Germany but sales in the UK were down 6.4% for the year as a whole, though December sales were up 39% compared with a year ago.

Germany saw the biggest rise in sales in 2009 – up more than 23% compared with 2008 but sales for December were lower than a year ago, following the end of the German car scrappage scheme in September. The UK’s scrappage scheme is due to end in February, with a quota system for manufacturers introduced to share out what remains of the fund.

Ivan Hodac, secretary general of the ACEA, warned that the positive figures for December compared with an extremely bad period for the sector at the end of 2008 and added that some manufacturers would also suffer from the end of the various scrappage schemes.

“The scrappage schemes mainly benefited the volume manufacturers like Volkswagen, Renault and Fiat,” he said. “2010 will be extremely difficult for these companies.”
Renault and Peugeot-Citroen increased their combined share of the European market in December by 3.5 percent as car buyers in France rushed to take advantage of the 1,000 euro incentive ahead of the scaling down of the scheme on January 1st when the subsidy was cut to 700 euros.

Renault saw new registrations for its namesake brand rise by half in December and alliance partner Nissan, which counts on the UK for a major part of its European sales, saw its sales in the region nearly double during the same period. Fiat grew their volumes by 23 percent, capitalizing on a 17 percent rise in the Italian home market as well as overall strong demand for small cars such as the Punto and 500 driven by the scrappage incentives.

By comparison, VW suffered a below par month with their sales up just 2.2 percent as demand slowed due to the end of Germany’s scrapping incentive in September. The country’s registrations remained high in October and November because of the residual effect of the 2,500 euro subsidy.

Source: BBC / Automotive News