Automotive Industry and Markets

Europe Market

The Western European passenger car market remained in the growth zone in 2017.

Western Europe

The Western European automobile market remained on a growth trajectory in 2017. There were more than 14.3 million new vehicle registrations last year in Western Europe – growth of almost 3 percent. That put the Western European automobile market almost back on par with its average pre-crisis level, and 13 countries out of 18 posted growth. Spain and Italy in particular again enjoyed robust growth. The German automobile market also proved to be a growth driver, achieving the highest market volume of this decade to date.

The year 2017 was not a good year for the British automobile market. New car sales fell 6 percent to 2.5 million vehicles. This was the biggest decline in the United Kingdom since 2009, when the Global Financial Crisis put a crimp in demand. Uncertainty about the consequences of Brexit and the concomitant devaluation in the pound sterling against the euro created a headwind.

New registrations in France increased by 5 percent to 2.1 million units. Especially in the second half of the year the market again gained momentum, with growth rates of fully 6 percent in the third quarter and 7 percent in the fourth. This marked the French market’s return to pre-financial crisis levels. In 2017 the Spanish automobile market enjoyed a sustained good economic run. New registrations in Spain increased by 8 percent to 1.2 million units. In the process the market is continuing its recovery from its historic low in 2012 (700,000 new registrations). Again in 2017 there were almost 2.0 million new automobile registrations in Italy, growth of 8 percent. Both in Italy and Spain this is still more than 20 percent below the pre-crisis level.

In the new EU countries new automobile registrations increased by around 13 percent to more than 1.3 million vehicles. With 486,400 new registrations, Poland, as the biggest single market among the new EU countries, posted growth of 17 percent. The Czech market grew 5 percent to 271,600 units, a somewhat lower growth rate than 2016 (plus 12 percent).

Eastern Europe

New EU Countries
With growth of around 13 percent last year, new passenger car registrations in the new EU countries rose above the 1.3 million mark for the first time. This means the new EU Member States continued their growth path that started in 2014 and has brought double-digit expansion every year since then. Poland is the largest individual market among the new EU countries, and with 486,400 new registrations it recorded a rise of 17 percent. Growth slowed down somewhat in the Czech Republic, falling from 12 percent in 2016 to 5 percent last year (271,600 units). Slovakia totaled 96,100 newly registered passenger cars (+9 percent), thus setting a new record. By contrast, other Central and Eastern European markets are still clearly suffering the after-effects of the global economic crisis. For example the Hungarian passenger car market, despite 20 percent growth to 116,300 new registrations in 2017, still needs another 70,000 units to match its pre-crisis level. And the Romanian market recorded 105,100 new registrations in 2017 (+11 percent), which was around 66 percent below its all-time high in 2007.

Turkey

The Turkish automobile market has embarked on an astonishing expansion path since the end of the financial crisis, doubling its volumes compared with 2007 to 722,800 new automobile registrations in 2017. Automobile production in Turkey also grew by 20 percent in 2017 to a new record level of 1.1 million units. Year-on-year sales last year however fell by 5 percent. Price increases following the currency devaluation together with the hike in the special consumption tax (ÖTV) on automobiles in November 2016 slowed demand. All in all, the Turkish economy should have grown at least 6 percent in 2017. This growth is, first and foremost, the product of massive tax cuts and credit subsidies by the Turkish state following the political crisis since the summer of 2016. However, the economic programs have left a legacy of high inflation and a rising budget deficit.

Russia

The Russian light vehicle market recovered discernibly in 2017. With 1.6 million units sold, sales were around 12 percent above the previous year’s level. The overall economic situation in Russia also improved in 2017. Rising oil prices in particular are benefiting the Russian economy, heavily dependent as it is on commodities. But economic sanctions continue to hobble the business climate. At the same time, Russia is using government programs to boost vehicle sales: preferential financing terms, scrappage schemes and investments in future technologies totaled around 1 billion euros. The prospects that the recovery will continue in 2018 are good.

Dr. Manuel Kallweit Head of Department Markets, Analysis, Raw Materials, Statistics

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