Europe's car-sales outlook is bleak after worst year in decades

Europe’s top auto markets posted their biggest annual sales declines in decades, with ongoing coronavirus restrictions expected to crimp a recovery early this year.

File image used for representational purpose (REUTERS)
File image used for representational purpose

Registrations fell by about 25% last year across Germany, the UK, France, Italy and Spain, Europe’s five largest car-buying countries, according to industry associations and transport ministries. The resurgence of Covid-19 led several governments to re-implement lockdown measures that are likely to drag on demand into early 2021.

Germany’s new-car registrations dropped roughly 20% in 2020, based on preliminary data from the Federal Motor Transport Authority, which will post detailed numbers Friday. Figures released earlier this week showed sales plunged 32% in Spain, 29% in the UK, 28% in Italy and 25% in France. The UK auto industry’s trade group said the country’s decline was the worst since 1943.

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Also Read : UK lockdown causes biggest drop in new car sales since World War Two

The data show the outsize impact the coronavirus had on Europe’s car industry last year relative to China and the US, where car-buying was more resilient. Ongoing weakness in demand poses a risk to the euro-area economy, which relied heavily on the manufacturing sector in staging a recovery in the second half of last year.

“We are in a deep crisis," Pierre-Louis Debar, head of statistics for French car-industry group CCFA, said in an interview. “It’s more extensive than anything we’ve seen in the past."

Bloomberg Intelligence analyst Mike Dean said the European auto market could pick up in the second quarter if governments lift lockdowns. Still, BI anticipates sales to finish 2021 down about 15% from 2019.

“The first quarter of 2021 will be difficult," Dean said.

Electric vehicles have been a bright spot within the region’s malaise, with BI estimating that hybrid, plug-in hybrid and battery-powered vehicles exceeded sales of diesel cars last quarter for the first time. The European Automobile Manufacturers Association will release Europe-wide registration data on Jan. 19.

Germany’s KBA on Wednesday said sales of purely electric cars rose more than 200% for the year, with Volkswagen AG seizing a 17% share of the segment, followed by Daimler AG’s Mercedes-Benz at 15%.

Also Read : Europe car sales fall 14% on drags from stricter coronavirus measures

In France, fully electric cars accounted for 6.7% of total sales over the year, compared with 1.9% in 2019. The Renault Zoe was the top-selling EV in France with 37,409 units sold, well ahead of the 6,477 Tesla Model 3s and 4,187 Volkswagen ID.3s registered in the country.

First Published Date: 07 Jan 2021, 16:23 PM IST
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