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Car sales decline in 13 of Europe’s 27 markets, despite 4.2% growth

Felipe Munoz, global automotive analyst at JATO Dynamics

Europe’s continued growth in new car registrations “could become dependent on a select few markets” after 13 of the region’s 27 markets register sales declines, Jato Dynamics has revealed.

The European car sales data specialist recorded a 4.2% increase in car registrations – taking the total to 1.16 million – during February, but acknowledged that the UK was not the only market suffering difficulties in the automotive retail sector.

The results mark the highest February volume since 2008, when 1.19 million cars were registered, as well as constituting the highest YTD volume since 2008, with 2.44 million units registered in Europe in 2018 so far.

Felipe Munoz, Jato’s global analyst, described the month’s results as “very encouraging” on the back of strong results for January, adding that it suggested the European car industry could continue to grow in the coming months.

But he added: “However, 13 of Europe’s 27 markets posted declines in February, so future growth for the industry could become dependent on a select few markets.”

The UK’s 2.2% year-on-year decline in February was overshadowed, in percentage terms, by declines Norway (-13.2%), Slovakia (-8.5%), Lithuania (-3.5%), Belgium (-3.4%) and Switzerland (-3.1%).

The biggest percentage increases in registrations during the month were seen in Croatia (46.8%), Greece (30.2%) and Hungary (24.6%).

Jato said in its market report that key markets such as Germany, Spain and France, had also performed well during the month.

SUV growth

However, it noted the continued decline of diesel sales across the continent and highlighted that SUVs remained a key driver of growth in February.

It said that the volume of SUVs registered was up by 24.7% (to 382,600) compared to the same month last year, meaning SUVs accounted for 33% of the total market in February.

In contrast, the rest of the segments combined recorded a significant decline in volume of 3.6%.

Jato reported that the overall volume growth of SUVs could be attributed to OEMs increasing SUV ranges.

Volkswagen Group’s SUV registrations increased by 37.7% to 68,700 units, placing it behind Renault-Nissan, which continues to enjoy the largest market share of the segment.

PSA experienced strong growth in the SUV segment, increasing its registrations of SUVs by 80.3% in February 2018, with a total of 67,900 SUVs registered.

Hyundai and Kia also increased market share in the segment due to the strong performances of the Kona and Stonic SUVs.

Diesel's decline

Commenting on the fate of diesel vehicles, Monoz said: “Diesel continues to decline and its market share fell to 39.5%, with volume falling by a significant 12.8 percentage points in February.

“This was largely caused by falling demand in Germany and the UK, where diesel vehicle registrations decreased by 19.2% and 23.5% respectively.

“Demand for petrol is continuing to grow as diesel declines - petrol registrations increased by 16% in February. Alternative-Fuelled-Vehicles were also able to take advantage of the decline of diesel, growing by 18.5%.”

Overall, VW Group had another solid month, Jato reported, increasing its market share from 23.1% to 24.3% in Europe.

FCA posted the biggest decline in market share of all car groups (-0.6 points) due to decreasing demand for its Fiat (-9%) and Lancia (-42%) brands.

However, Jeep posted good results due to the new Compass model, which was the brand’s best seller.

Renault-Nissan also saw its market share decline in February 2018 due to decreased demand for its SUV range.

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