Final 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.