The EU's new-car market experienced significant growth in June, driven by fleet and rentals and continuing the positive trend observed over the past 10 months, according to a new report from German market research firm Dataforce. Overall, new car registrations in Western Europe are projected to increase by 10.2% to 11,2 million vehicles this year,
However, Dataforce analysts noted, “the figures for 2023 are being compared to the months of the previous year when manufacturers experienced delays in deliveries due to parts shortages”; these vehicles were partially delivered in the second half of last year and led to a disproportionately high increase in new registrations from August 2022. The analysts expect growth rates of new registrations will weaken in the second half of the year.
In June, new car registrations in the major European countries were significantly higher than the corresponding figures of the previous year. New registration numbers for January to June also surpass the previous year’s numbers.
Tactical registrations are increasing. Private market shows the weakest development from all sales channels. Strong growth can be seen for BEVs and PHEVs in most of the countries.
Economic Development Western Europe
Looking to Western Europe’s economic growth this year, the Dataforce report indicated a small increase of 0.8% this year, with a persistently high inflation rate of nearly 6%.
Factors influencing this weak economic situation include ongoing political uncertainty (such as the Ukraine conflict), high energy price pressures, erosion of purchasing power among households, a weaker external economic environment, strained trade relations with China, more restrictive financing conditions, and the economic consequences of the COVID-19 pandemic.
Outlook for Full Year 2023
Manufacturers’ improved delivery capability and resulting reductions in order backlogs have led to a significant increase in new car registrations in recent months, overshadowing declining demand due to significant increases in energy and living costs.
Dataforce analysts issued a second caveat, however, noting these favorable registration figures are expected to slow in the coming months. “It is only towards the end of the year that an increase in new car registrations in Western Europe is expected again.”
Forecast 2024: Looking Better
According to Dataforce, economic growth in Western Europe “will turn positive again as energy prices decrease, foreign demand increases, supply bottlenecks are resolved, and uncertainty diminishes.” In addition, a strong labor market “will foster higher real incomes, and employment will decline to historically low levels.”