European sales stabilized in July, helped by UK and French rebounds

The UK’s rebound and a recovering French market limited the July decline in new-car sales in Europe to less than 4 percent. The drop was the smallest percentage decline since January and the first single-digit contraction since the spread of the coronavirus forced countries into lockdown starting in March.

Registrations in July fell 3.6 percent 1.28 million vehicles in the European Union, UK and the European Free Trade Association (EFTA) countries, according to data from JATO Dynamics market researchers.

The decline was a substantial improvement on two-digits slumps in previous months.

In June registrations dropped by 24 percent, according to data from industry association ACEA. In May the fall was 57 percent and in April registrations plunged 80 percent during the height of government-mandated lockdowns that forced dealerships to temporarily close. The March fall was by 53 percent. 

European sales were already weak before the pandemic stuck, with registrations down 7.6 percent in January and 6.9 percent in February.

The UK market was the biggest driver of the stabilization of sales in July, with registrations up up by 11 percent to 175,000, after showrooms were open for the first full month since lockdown measures eased. The July increase was the first monthly rise in registrations in the UK so far this year.

Registrations in France jumped by 4.6 percent 179,000, helped by government incentives to combat the economic effects of the COVID-19 crisis. A French government program to provide up to 5,000 euros for buyers who traded in an older, higher-polluting car for a new or used model that meets the latest emissions standards ended on July 31 after financing about 200,000 transactions.

The scrapping program will continue in a more limited fashion, along with improved incentives to boost sales of battery-powered and plug-in hybrid vehicles. 

Sales in Europe’s biggest market -- Germany – fell 5.4 percent to 315,000 vehicles. The Italian market was down 11 percent to 137,000 and Spanish registrations were flat at at 121,000, according to JATO data.

Brand winners/losers

Renault brand had the biggest increase in registrations in July -- up 24 percent, followed by BMW and Mini, both close to a 20 percent. Kia was up 13 percent and Volvo sales rose 9 percent.

PSA Group had the worst performance among automotive groups. Its sales fell 16 percent. Peugeot brand’s 1.5 percent increase in sales was not enough to offset Opel/Vauxhall’s 35 percent plunge and Citroen’s 17 percent decline.

Volkswagen Group registrations dropped by 4.4 percent, with Skoda up 7 percent, Audi down 7.7 percent, Seat down 17 percent and VW brand down 6 percent.

Fiat Chrysler group sales fell 6 percent. Fiat brand sales were flat, while Alfa Romeo registrations fell 25 percent, Lancia 16 percent and Jeep 18 percent.

Among other brands, Ford Motor’s registrations were down 5 percent and Dacia sales dropped by 13 percent.

Several luxury automakers posted sales gains in July. BMW’s brand 19 percent increase to 72,000 registrations meant the automaker sold more cars than Audi, whose volume decreased 7.7 percent to 64,000. Mercedes-Benz brand was the top-selling premium brand with sales up 4.2 percent to 79,000. Land Rover sales increased by 5.8 percent while Jaguar’s volume fell 22 percent. Lexus increased sales by 3 percent.

Among Asian brands, Kia up by 13 percent again outsold sister brand Hyundai, which was down by 7.2 percent. Toyota registrations were flat. Nissan, Suzuki, Honda and Mazda all posted declines, with Suzuki falling most at 36 percent slump.  Nissan was down 8.7 percent, Honda fell 2.6 percent and Mazda by 16 percent. Mitsubishi was up by 4.1 percent

Through July, overall European sales fell 34 percent to 6.44 million, according to JATO.

Registrations for the full year are forecast by ACEA to decrease by 25 percent, which would represent the lowest number of new cars sold since 2013, when the industry had come through six consecutive years of decline in the aftermath of the 2008-2009 financial crisis. 

ACEA forecasts registrations in the European Union to fall by more than 3 million vehicles to 9.6 million this year. The bleak outlook represents the sharpest drop ever witnessed by Europe’s automobile sector, ACEA said in June.