New car market grows in France, Germany, Spain and Italy as UK stalls
The European new car market recorded a solid 3.1% growth in 2017 with 15.57 million new cars registered overall. This is the highest volume of registrations since 2007, according to automotive analysts Jato Dynamics.
However, diesel’s falling dominance and stalling registrations in the UK meant that year-on-year growth was not as strong the 6.5% and 9.3% volume growth experienced in 2016 and 2015 respectively.
The UK’s poor results are at odds with other Western European countries, where the German and French markets grew 2.7% and 4.5% respectively. The UK was one of only five countries where registrations actually fell.
The market continued to grow strongly in Eastern and Southern Europe, where volumes grew by 12.7% and 6.2% respectively.
The drop has been blamed on Brexit uncertainty and confusion regarding potential punitive measures for new diesel vehicles.
Diesel crisis continues
The diesel issue is by no means limited to the UK – European diesel numbers were down 7.9% in 2017, with the fuel suffering its lowest share of the market for a decade (43.7%).
Overall though, petrol and alternatively fuelled vehicles (AFVs) managed to make up for the shortfall across Europe as a whole, with registrations up 11% and 46% respectively.
Despite this overall rise, Jato predicts that the market is slowing down overall, with results for December representing the lowest registrations for the month in five years. This wasn’t helped by the diesel issue however, which decreased by –20.5% in December alone.
SUVs are in, MPVs are out
The vast majority of market growth was driven by the exploding SUV sector, which accounted for a record 4.56 million registrations in 2017 and a market share of 29.3%. Comparatively, SUVs made up just 8.5% of the market ten years ago.
Registrations in all sub segments of the SUV sector grew, with large SUVs like the new Skoda Kodiaq and Renault Koleos proving the most popular. This coincides with a –15.1% fall in MPVs, which suffered their lowest market share of the century so far.
Any other trends?
Despite falling BMW registrations in the UK, it proved to be the strong performer, but Mercedes was the top-selling premium brand in 2017 knocking Audi off the top spot. Overall, the three German manufacturing groups accounted for 79% of the premium market in 2017.
VW Group lost a nominal 0.25% of its market share, but managed to increase volume by 2% to 3.7 million units. The small increase was attributed to the Skoda and Seat brands which increased SUV sales by 74% and 254% respectively.
The acquisition of Opel by PSA did not help the French manufacturing group to flourish in 2017, with growth for its Peugeot and Citroen brands offset by the declines of Opel - resulting in overall growth of just 0.7%.
The top performers
The Golf proved to be Europe’s most popular car despite a 1% fall in volume. It was the top seller in just five European markets in 2017, compared to eight in 2016. This has been put down to the fall in diesel registrations, although if the growing popularity of the GTE is anything to go by, VW shouldn’t be too worried.
The Qashqai was Europe's best-selling SUV for the second year in a row, coming in at number five in terms of model registrations for the first time ever. Other popular SUVs included the VW Tiguan and Peugeot 3008.
Should we be worried in 2018?
Despite the UK’s falling registrations, Jato expects the entire European market to slow further in 2018 and, despite Brexit implications and the continuing decline in diesel sales, the UK remains the largest new car market in Europe (2,540,617 units in 2017), after Germany (3,441,262)
Mike Hawes, SMMT chief executive, commented: “2017 has undoubtedly been a very volatile year and the lacklustre economic growth means that we expect a further weakening in the market for 2018. The upside for consumers, however, is some very, very competitive deals.”