Euro Auto Production Down 35% in First Quarter 2009; Second Half Production May be Down 25%; Small Cars Hit New Record Share
15 July 2009
| The small car segment has increased its share. Source: ACEA. Click to enlarge. |
In the first quarter of 2009, automotive production in Europe fell by 35% to 3.4 million vehicles, according to the latest Economic Report from the European Automobile Manufacturers Association (ACEA). While fleet renewal schemes (vehicle scrappage) have helped segments of the passenger car market in some countries, overall vehicle demand in Europe went further down as well.
Van (-57%) and truck production (-56%) dropped even more than the manufacture of passenger cars (-31%). With a drop of 57.4%, the UK was the worst affected of the five largest European producers, followed by France (-46.0%), Spain (-40.2%), Italy (-38.6%) and Germany (-32.3%). In Austria, production went down by 69.2%.
As the European economy stayed in recession, market demand for vehicles continued to suffer: over the first quarter, new passenger car registrations dropped by 17.2%, new commercial vehicle registrations by 35.7%; five months into the year, the decrease was 13.9% for passenger cars and 37.6% for commercial vehicles.
Reflecting consumer concerns about the general economy, small cars reached a market share of 44.9% in the first five months of 2009, surpassing the record of 38.8% over the whole year 2008. At the same time, average engine size and power fell from 1,706cc (whole year 2008) to 1,635cc, and 86kW (whole year 2008) to 82 kW. These trends were accompanied by a drop of diesel cars market penetration to 46.1%, and that of 4x4s to 8.4%.
While the outlook for the second half of 2009 remains uncertain, current developments imply that production may fall as much as 25% over the whole of 2009 for passenger cars, and at least 50% for commercial vehicles.
Demand. Fleet renewal incentives are now in place in 13 Member States of the EU to stimulate demand and replace older vehicles with cleaner and safer ones. While mainly affecting the segments of small and medium-sized cars, they have had some positive effects in the first five months of 2009, when car registrations were down 13.9%, compared to -19.6% in the last quarter of 2008. Notably, the drop in May registrations was limited to 4.9%, helped by registrations going up 4.8% in Austria, 5.1% in Greece, 11.8% in France and 39.7% in Germany, all of which have fleet renewal schemes in place.
Forecasts are still very uncertain and subject to constant adjustment, notes ACEA. If trends seen in the first five months of 2009 continue, passenger car production could decline by a quarter and commercial vehicle production by half over the whole year. Most manufacturers do not expect the situation to improve until 2010. However, passenger car demand might drop very abruptly at the beginning of next year if fleet renewal schemes are not phased out gradually, the association concluded.
Resources
ACEA Economic Report, 1Q 2009
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