Media & Insight
July 25, 2019
Demand for SUVs slows to lowest recorded rate in June, indicating that registrations may have peaked in the European market
- SUV registrations grew by just 0.7% in June 2019, but it was still the third highest month ever for sales in the segment
- The overall market was down by 7.9% – the highest monthly drop so far in 2019 and the lowest June result since 2015
- The decline was due to a fall in private registrations, which counted for 41% of the total market
- Tesla and Toyota bucked the trend and posted the highest market share gains
Following two consecutive months of growth, the European car market dropped in June 2019 as 1.49 million vehicles were registered – down by 7.9% on the same time last year. It was the biggest monthly drop so far in 2019, as only four out of the 27 markets included in JATO’s analysis posted growth but counted for a marginal 2.6% of total registrations. “June’s results confirm that conditions in Europe are getting worse. We continue to see a repeat of the same pattern: lower consumer confidence is mostly affecting diesel car registrations, which used to dominate the European landscape,” commented Felipe Munoz, JATO’s global analyst.
The diesel crisis is particularly challenging in Scandinavia, where electric cars continue to increase their market share. In June, diesel car registrations in the four Scandinavian markets fell by 52% to just 20,092 units, marking the first time that these cars were outsold by electrified vehicles (20,182 units). The noticeable YoY drop can be partially explained by the record month of registrations seen in Sweden in June 2018, which came ahead of a new tax hike which hit the market in July of that year.
In fact, the results of diesel and electric vehicles contrast heavily across Europe. In June 2019, diesel car registrations fell by 21% and made up 31% of the total market, while demand for electrified vehicles increased by 20%. However, the latter’s growth is still not strong enough to enable them to become a big player on the market, as they still account for just 7.5% of all registrations. “The drop seen in diesel car registrations continues to be higher than the growth posted by electrified cars. In order to see a real change in their market position, electrified vehicles need to attract more consumers, or else they won’t be able to capitalise on the demise of diesel,” explains Munoz.
“But the most worrying result from June was not the continuous diesel decline, but the slowdown in demand for SUVs,” continues Munoz. SUV registrations totalled 556,400 units during the month, up by only 0.7% compared to the 552,500 units of June 2018. “Although it was still the third highest month ever for sales in the segment (behind March 2018 and March 2019), there are two factors that explain the limited growth. The first is that the poor conditions of the wider market are finally impacting SUVs, which are usually more expensive than regular car types. The second, which is more concerning, is that SUV demand may be peaking after many years of growth. If the second explanation is true, then Europe could be losing its main driver of growth,” Munoz concluded.
Most of the slowdown in the SUV segment in June came from premium SUVs, where demand fell by 5% as a result of double-digit drops at Mercedes, Volvo and Land Rover. Although several mainstream brands posted growth, such as Seat (+37%), Dacia (+21%) and Volkswagen (+19%), the three most popular SUV models posted the biggest drops: Nissan Qashqai (-15%), Volkswagen Tiguan (-18%) and Peugeot 3008 (-18%).
There were however some success stories in June. Amongst all the automakers, Tesla posted the highest market share gain, as registrations increased from 4,034 units in June 2018 to 14,106 units last month. As we saw in Q1-2019, the brand is posting large increases in its Model 3 deliveries at the end of each quarter. In June 2019, the Model 3 was Europe’s best-selling premium midsize sedan, and – thanks to this model – Tesla has been able to more than triple its sales in the first half of 2019.
Toyota was the other big market share winner of the month. The new Corolla performed far better than the Auris, and the new Rav4 continued to climb the SUV rankings, hitting the top 10 mainstream compact SUVs. Along with Lexus, these brands controlled 72% of the hybrid car market in June.
It was also a good month for the Volkswagen T-Cross, which hit the top 50 with 11,058 recorded sales, and the Citroen C5 Aircross, which recorded 7,741 sales and outsold the Mazda CX-5 and Jeep Compass. Meanwhile, the Mercedes A-Class occupied the 4th position amongst compact cars – only behind the Golf, Focus and Octavia, and the Ford Focus was boosted by increased demand in Germany, Italy and France.
The Hyundai Kona also did well in June, recording almost 8,700 sales – of which 22% originated from its electric version. Elsewhere, the Seat Tarraco recorded 3,910 registrations and became Europe’s 4th best-selling mainstream midsize SUV – only behind the 5008, Kodiaq and Outlander.
- European registrations of B-SUVs increased by 16% in July, ahead of the launch of the Volkswagen T-Roc
- All the Big 5 European Markets experienced growth, as SUV’s continued to dominate in April
- Eastern European car registrations up by 15.5% in H1 2017 due to strong economic performance of region
- 13% of total new car registrations in Europe made up by EVs in January 2020
- Renault continues to lead volume brands as new car CO2 emissions fall across Europe