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backEUROtalk April, 2012

March 2012 West European Car Sales

- Car sales in Western Europe fell by 7.1% in March. This was the sixth consecutive month of year-on-year declines, with nearly all markets shrinking.

- The market that stands out as being in most trouble in March is Italy. It was already in bad shape this time last year, but plummeted a further 27% last month taking the Seasonally Adjusted Annualised Rate (SAAR) of sales down to 1.23 mn units/year. An auto transport truckers strike has had some impact, though the ongoing weakness of the economy is the critical issue.

- Result for Germany: sales up by 3.4% — the year-to-date market was up by 1.3%. Germany continues to perform better than its European neighbours and despite the ongoing eurozone concerns. UK sales were also a little higher in what is seasonally an important month because of the registration plate change.

- However, France and Spain both struggled compared to a year ago, with no suggestion that this situation will change any time soon.

Commentary
The 7% fall in the West European car market in March came as many markets in the region were down. The SAAR fell to an estimated 11.8 mn units/year for the latest month. That weakness is, in no small part, associated with the struggling Italian car market, with Italy’s selling rate having fallen to a desperately weak 1.23 mn units/year last month. Part of the explanation for the fall in Italy was a strike by auto transport truckers, and while it is difficult to gauge the exact impact of the strike on the market, much of weakness of the SAAR can be put down to the ongoing economic headwind.

France also suffered a fairly heavy year-on-year fall last month. Once again for France, the comparison is with a market in early 2011 that was inflated by a spillover of scrappage scheme registrations from late 2010. March 2011 was the last month in which the market was inflated by the scrappage scheme, and so the year-on-year comparisons will not look so dire going forward. However, a selling rate of 1.94 mn units/year indicates that the market is far from strong at the moment.

Spain continued to look weak with another sub-800,000 units/year selling rate. At this stage, Spain does not look likely to improve on the dismal 2011 total car market number, as the economy struggles in the face of deep fiscal retrenchment.

Better news came in from Germany. Car registrations are up 1.3% so far in 2012, and while the wider eurozone looks set to suffer a contraction in the economy in 2012, the German economy appears better positioned, with German business confidence having improved recently. In the UK, car registrations were up 1.8% in what is a seasonally strong month due to the registration plate change — private retail sales drove this improvement.

To download 3-page report, please click here.

Source: LMC Automotive - GAI

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