Greek auto sales have been racing ahead in recent weeks. They are up 16% so far this year, as people seek ways to protect their money in the event of Greece leaving the euro. April saw the strongest rise, with sales up an astonishing 47% versus 2014. As The Telegraph noted:
“People living in a country gripped by financial turmoil often worry about the security of their money. If it’s in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.”
Ironically, the main winners from this are German car makers, as Greeks buy more German cars than any other brand.
Across the reset of the continent, the picture is more mixed. As ACEA comment:
- France (‐3.5%) and Germany (‐6.7%) faced a downturn, whilst Spain (+14.0%), Italy (+10.8%) and the UK (+2.4%) saw positive growth
- But demand was largely supported by the EU’s new members, especially Poland (+11.0%) and the Czech Republic (+17.6%)
In terms of the top 5 major manufacturers, only Renault showed an increase over the month, up 5%. And this was despite increased discounts by majors such as Ford (14%) and Fiat (16%) in key markets such as Germany.
Overall growth is also slowing, as the chart above confirms. Sales so far in 2015 are up 6.8%, but May was only up 1.3%. And the market continues to highlight the change underway in consumer preferences. Thus the biggest gainer has been sales of the Mercedes Smart car. Designed for cities, its sales were up 84% in May, and 56% so far this year after an updated 2-seater version, and a new 4-seater model went on the market.
Meanwhile, my own London borough has joined Paris’ fight against diesel engines, charging a £96 ($150) premium for its street parking permit. And an even bigger campaign is about to get underway, as London seeks to boost electric vehicles and car-sharing across the city:
- The city plans to spend £100m to boost the use of electric vehicles and car sharing across the capital
- The model is Paris,where 220k drivers now use its Autolib scheme – taking 31k private cars off the road
- Cost, and the need to reduce air pollution are the key drivers
This is a big win for French company Bollore, which has pioneered this experiment in Paris and has now won the London contract. It highlights how markets are moving towards a more service-led mentality, and away from a simple product focus. As Bollore note:
”Lots of people aged 18 to 25 are using the cars to go out for the evening with their friends. They might use them to go to a nightclub, dinner or the theatre…. We expect London to be bigger than Paris. It won’t be quite the same as Paris as English people are different but we have four years’ experience in Paris and that will help us.”
Their success highlights the opportunities now being created as we move slowly but steadily into the New Normal.
Companies and investors who seize these opportunities will do very well – unfortunately, at the expense of those who cling to the supply-driven and product-based strategies of the past.