September 24, 2018
European car market sees highest recorded August registrations in 20 years due to 38% increase in business registrations ahead of WLTP
- The European car market saw growth of 30% to 1.17 million units, the highest August result of the last 20 years
- August was the highest monthly growth registered in almost a decade, breaking the record seen in November 2009, when volume grew by 25%
- But registrations were boosted by stock clearances ahead of the introduction of WLTP
The European car market saw spectacular growth in August, recording the highest August result in the last twenty years. But this strong growth is somewhat artificial, as registrations were boosted by stock clearances ahead of the introduction of WLTP on the 1st September. This is evidenced by unusual results in typically slow selling segments, and booming business and fleet registrations. This last-minute push for registrations just a month before the introduction of WLTP demonstrates a lack of preparation from many car makers.
Business/fleet purchases posted a 38% increase in August (data for 15 countries), jumping from 53% of total registrations in Aug-17 to 59% last month. This is in comparison to registration growth of 11% in July and 5% in June. In contrast, private registrations increased by 11% in August, counting for 41% of the total. This change was more evident in Spain, Netherlands, France and Austria, where business/fleet registrations grew by 86%, 65%, 54% and 54% respectively. The highest market share for business/fleet registrations were seen in Czech Republic (76%), Slovenia (75%) and Finland (73%).
In addition, the segments that traditionally post timid growth, such as subcompacts and compacts, also recorded strong growth, up by 25% and 21% respectively. There was also an unusual 2% growth in the MPV segment, where volume has been on a near constant decline during the last years.
“As we anticipated last month, it’s clear that registrations were boosted in August by car makers rushing to register their vehicles before the introduction of WLTP. These results show how artificial registrations can be, and how easily they can be manipulated by external factors. The evidence of the WLTP effect shows how ill prepared car makers were, and it will be interesting to see how car makers continue to respond to WLTP in the coming months.” comments Felipe Munoz, JATO’s Global Analyst.
A number of brands saw strong growth in August. But only the top 3 of the top 10 bestselling brands outperformed the market’s average growth. Volkswagen’s volume was up by 45%, boosted by the business/fleet registrations, which increased by 56% and counted for 2 in 3 of the cars registered. This doesn’t entirely explain their volume growth, as the T-Roc continued to gain traction, becoming the 15th best-selling car in August.
Renault also saw a big increase of 72% to almost 100,000 units. While its private registrations jumped by 33%, business/fleet registrations doubled and now count for 61% of total volume. Unlike Volkswagen, Renault doesn’t have a recently launched car to help explain this growth. In comparison, its registrations grew by 20% in July and 1% in June. Audi, ranked third, was up by 33%, boosted by business/fleet registrations, which counted for 73% of the total and increased the volume by 55%.
The remaining seven brands of the top 10 lost market share, with Mercedes posting the highest drop, as its volume fell by 3%. This is mainly due to a 28% drop in its private registrations, while the business/fleet grew by only 3%. Some of the brand’s key products, such as the C-Class, CLA and GLA are now seen as older models and face increasing competition from newer rivals.
The impact of business/fleet registrations was also seen in fuel type, as diesel registrations increased in the business/fleet channels – up 13% against a 10% drop in private registrations. This means that the introduction of WLTP even benefitted diesel cars despite recent decreases in the fuel type. However, the biggest boost was seen in the business/fleet registrations of gasoline cars, which soared by 68%.
SUVs were the clear winners of the month, with their volume up by 57%. They were led by the Nissan Qashqai, which doubled its registrations, the Renault Captur and the Tiguan (excluding the Allspace). The VW T-Roc occupied the fifth position in the SUV ranking and the third position in the B-SUV segment. Among the latest launches, the Seat Arona registered 9,357 units, Citroen C3 Aircross 9,253, Jeep Compass 8,467, Skoda Karoq 5,607, VW Tiguan Allspace 5,479, Opel/Vauxhall Grandland 5,353, and Hyundai Kona 5,341.
The subcompacts volume jumped by 25% to 225,200 units, led by the Renault Clio, Volkswagen Polo and Dacia Sandero. The compact segment, up by 21% to 213,200 units was led by the Volkswagen Golf, Renault Megane and Skoda Octavia. Other big increases include the sport cars segment, up by 39% to 8,600 units, led by the Porsche 911, Mazda MX-5 and Ford Mustang.
For more information on the impact of WLTP, information on fuel type in the automotive market, and registrations insights in Europe-15, please see the JATO Blog.
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