EU auto sales slide for 4th year in a row

EU autos Jan14Final data for EU auto sales has now been published, and is summarised in the chart above:

  • Sales fell for the 4th year in a row in 2013 (red square) to 11.8 million
  • This was a 2% fall versus 2012 (green line) and a cumulative 18% fall versus 2007′s peak
  • Only 2 countries, the UK and Spain, saw sales increase over the year
  • The other 3 major markets of Germany, France and Italy saw further declines

The 3% increase in Spain was due to yet another ‘cash-for-clunkers’ programme by the government.  Desperate to boost consumer spending and revive manufacturing, they are offering €1k ($1.3k) for every 7 – 10 year-old car that is scrapped and replaced by a new car costing less than €25k.

The reasons for the UK’s 11% increase were more complex:

  • Consumers have received a £14bn windfall ($23bn) since 2011 from claims for mis-selling of insurance policies
  • A large number of claimants have used the money as a down payment for a new car, or to fund the total price
  • Payments have averaged nearly £500m per month since the end of 2011
  • 2013 has seen £5.5bn of payments, which provided major support for car sales and consumer spending

As a result, the UK is now the 2nd largest EU market, with sales at 2.3m versus Germany’s 3m.  Back in 2009-10, UK sales were 300k lower at 2m.

Clearly these extra sales are a one-off event.  They will also presumably lead to lower sales in the future when the claims payments cease, as by then most adults will have replaced their old car with a new one.  And at the moment, it is hard to see what might happen in the rest of Europe to balance these lower UK sales.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.