EU first-half car sales down 38%, France up in June after rescue package brings hope

Author: Jonathan Lopez

2020/07/16

LONDON (ICIS)--EU consumers are returning to car dealerships, with sales in June approaching 1m units, but the impact from lockdowns led to a drop of 38% during the first half of 2020, according to trade group ACEA.

A shimmer of hope for the sector came from France, where sales increased in June by 1.2%, year on year, after the government approved tax incentives to prop up low-emission vehicles sales at the beginning of the month.

The petrochemicals-intensive automotive industry has been hit hard by the pandemic-related lockdowns across most European countries.

Sales in April collapsed by more than 75% as car dealerships remained shut in most countries while authorities battled to contain the spread of coronavirus.

May showed some recovery, and sales in June at 950,000 units showed the upward trend continuing; they were still 22% lower than in June 2019, however.

“Although dealerships opened for business again after lockdown measures were lifted, consumer demand did not fully recover last month,” said ACEA.

The EU automotive sector was one of the strongest industrial sectors in the region before the pandemic, with all major countries being both key producers and consumers.

The industry is labour-intensive and creates millions of indirect jobs; governments have implemented or are mulling incentives to prop up the sector.

France's increase in sales in June was unique among major markets, where data continue painting a worrying picture; sales in Spain (-36.7%), Germany (-32.3%) and Italy (-23.1%) remained lower than in June 2019.

BLEAK FIRST HALF
Over the first half of 2020, Spain’s market has shrunk by almost 51%, although the country’s petrochemicals industry is hopeful a €1.0bn rescue package passed by the government in June, including grants for consumers to purchase vehicles, will quickly prop up demand.

Italy’s sales over the first half of 2020 fell by more than 46%; the government is also mulling a rescue package for the sector.

Sales in France and Germany fell around 39% and 35%, respectively.


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EU cars sales data by ACEA includes figures for 27 EU countries; the UK officially left the EU on 31 January 2020.

Front page picture: France's vice minister for the economy Agnes Pannier-Runacher at a car dealership in June as the cabinet passed a rescue plan for the industry which helped sales increase last month 
Source: Isa Harsin/SIPA/Shutterstock 

Graph by Miguel Rodriguez-Fernandez