Data compiled by GlobalData from various European trade associations shows that the Western European light vehicle market fell by 79.3% in April as COVID-19 lockdowns exerted their toll on vehicle markets. Calum MacRae considers what might come next.
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Sales for the month totalled just short of 290,000. This translates to a seasonally adjusted annualised rate (SAAR) of some 3.3m a further step down from March’s SAAR for the region of 7.4m and some way below SAAR rates seen in the 2008-2009 financial crisis.
Without exception Western European vehicle markets all suffered. As one would expect there’s a marked correlation between market performance, the extent of lockdowns imposed and how pervasive COVID-19 has been in countries.
Consequently, the three most impacted markets were Italy, where light-vehicle sales fell 97.4%, and Spain and the UK where the recorded fall was identical at 95.7%. Individual markets that managed to outperform the region were limited to two: Germany where sales fell 59.3% and the Netherlands which saw sales tumble 50.8%.
As the virus curve is flattened, it is hoped that April marks the nadir of the market, with some semblance of normality returning to lives as May moves on. However, the extent of the scarring that’s been wrought on economies is yet to be seen, nor can we know its effect on any market rebound as we move through the rest of the year.
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By GlobalDataGlobalData considers it likely that the market will need a kickstart at some point in the year when the COVID-19 threat is expected to be more muted through either successful suppression or better treatment outcomes. The form of any government and OEM-backed incentives will have to be carefully considered so as not to skew the market – as happened in the 2008-2009 crisis – and move the industry away from its sustainability objectives.
While incentives are likely to give the market some lift in Q4, our forecast for the Western European market in 2020 stands at 11.7m for the year a precipitous fall of 28.7% on 2019.
As it stands, we believe that Western Europe will be the hardest hit of all the world’s major light vehicle markets. By way of comparison, our forecast for the US is for a 14.4% decline to 14.6m and for China a 15.4% fall to 21.5m.
Calum MacRae is automotive analyst at GlobalData
