Discounts support EU auto sales as Paris plans diesel car ban

Uncategorized

SHARE THIS STORY

EU autos Feb15A mild winter, combined with 20% price discounts, has kept EU auto sales in growth mode.  Latest data from ACEA shows January sales at 999k were the best for the month since 2011’s 1.042m.  The chart above shows the 12-month trend line since 2005, to avoid seasonal fluctuations with the monthly data (blue line):

  • Sales were stable through to 2008 at around 12m, and recovered temporarily after 2009 due to government stimulus
  • But they then began a steady decline to below 10m until the end of 2013
  • Over the past year, however, manufacturers have made increasing use of discounts, which now average 20%, to support sales
  • Governments such as Spain’s have also introduced €2k subsidies ($2.3k), helping to push Spanish sales up 28% in January

At the same time, the industry is continuing its move into the New Normal, with 2 key issues now impacting the market:

The first is the continuing shift by private individuals towards low-cost cars, such as Renault’s Dacia.  Its basic model sells for around €7k, and saw its sales rise 23% in 2014 after a similar increase in 2013.

This parallels the second trend, which is the continuing decline in the number of private individuals buying cars.  As Peter Fuss at EY has noted:  “Not since the year 2000 have so few cars been bought by private individuals.”German driving

The second chart highlights two critical drivers for this move into the New Normal:

  • Europe’s ageing populations are driving less.  Once people move into their 50s and 60s, they stop being a taxi service for their children and they also stop driving to work once they retire
  • Young adults are driving less.  As BMW’s ‘Institute for Future Mobility’ described at our November conference, young people in the West no longer see taking a driving test as a ‘rite of passage’.  They also often prefer to use social media or public transport for both cost and environmental reasons

As a result, broader trends are starting to develop that will further reduce the attractions of owning a car.  One is the growth of car-sharing applications such as Uber.  Another is the discussion underway in Paris, France, about banning older vehicles from the city centre. 

This follows a call from the Mayor of Paris for all diesel cars to be banned by 2020.  And polls suggest a majority of Parisians support a diesel ban.

One simple reason is that car-owners are now becoming the minority in many major European cities.  As the Mayor notes, “Today 60% of Parisians already do not have cars, compared with 40% in 2001. Things are changing quickly“.

 

PREVIOUS POST

PVC export boom to Turkey supports EU chloralkali demand

17/02/2015

European chloralkali producers ended up having a relatively good year in 2014, d...

Learn more
NEXT POST

BRIJ auto sales head in different directions

19/02/2015

There has been a lot of wishful thinking over the past 15 years about the BRIC...

Learn more
More posts
Automakers face stiff headwinds in big emerging markets
19/01/2020

Brazil, Russia, India and China disappoint as manufacturers face investment demands of EVs © Bloomb...

Read
Contingency planning is essential in 2020 as “synchronised slowdown” continues
12/01/2020

The IMF has now confirmed that the world economy has moved into the synchronised slowdown that I for...

Read
Will stock markets see a Minsky Moment in 2020?
05/01/2020

Few investors now remember the days when price discovery was thought to be the key role of stock mar...

Read
Chart of the Decade – the Fed’s support for the S&P 500 will end with a debt crisis
22/12/2019

Each year, there has been only one possible candidate for Chart of the Year.  Last year it was the ...

Read
Boris Johnson will have to disappoint someone in 2020 as the UK finally leaves the EU
15/12/2019

Finally, after three and a half years, the UK has reached “the end of the beginning” wit...

Read
ACS Chemistry & the Economy webinar on Thursday
10/12/2019

Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard...

Read
Polyethylene’s crisis will create Winners and Losers
08/12/2019

Polyethylene markets (PE) are moving into a crisis, with margins in NE Asia already negative, as I h...

Read
What’s next for Brexit and chemicals?
04/12/2019

The UK is about to go to the polls again to try and decide the Brexit issue.  Chemicals will be one...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more