2015 was a good year for volume in some European markets, but margins were generally slim for volume players
Car sales in Western Europe grew by 14.3% in December according to data released by LMC Automotive.
The December selling rate came in at a whopping 14.3m units a year, the best result since the scrappage-inflated result of November 2009. However, the analysts at LMC noted that December can be a ‘spiky’ month in selling rate terms, with incentive pushes helping OEMs achieve year-end targets.
In particular, last month saw a major pull forward in sales in the Netherlands because of taxation change, while the UK market also saw an unusually high selling rate. Adjusting for these ‘outliers’ would see the West European selling rate closer to 13.5m units a year for the month.
For the year as a whole, LMC said the Western European car market reached just under 13.2m units, some 8.9% ahead of 2014. The market was pushed up by a gradually improving economic picture (if still weak, by historical standards) and a positive replacement cycle.
The UK market finished 2015 at 2.63m units — a record result (beating the previous record in 2003) — helped by attractive finance deals and a solid economic performance. LMC noted the December selling rate of nearly 3m units a year was ‘unusually high’, possibly indicating increased incentive activity.
In Germany, car sales in December were up by 7.7%, with the full year up by 5.6% to 3.2m units. The largest car market in the region has gained 170,000 units for 2015 versus 2014, taking it to a level not seen since 2009, when the government heavily incentivised sales on the back of economic recession.
In December there was also double-digit percentage growth again from Italy and Spain, the latter market climbing above 1m units for the full year (the best result in 7 years). Sales in France were also up comfortably for 2015, though, as with Italy and Spain, volumes remain below historical norms.
LMC forecasts that the Western European car market will rise by a further 3% to 13.6m units in 2016. LMC analyst Jonathon Poskitt remains cautious about the outlook. «The underlying car demand picture certainly improved in 2015,» he says. «And there was some resurgence of confidence. But the eurozone economy is stuck in a fairly low gear, despite unprecedented stimulus measures from the European Central Bank. Things are still a bit fragile. Interest rates could even rise in the UK, a market that looks to have peaked.»
