New car registrations are up 1.6% within the 15 countries of the European Union for the first six months of 2000, but this positive performance has concerned pan-European residual value specialist Eurotax.
Roger Dal Santo, international sales and marketing director of Eurotax, said: 'The high levels of new car registrations right across Europe are bringing unprecedented numbers of used cars to the market.
'To keep the market balanced, sales of used cars need to rise at the same pace as sales of new cars. As soon as the demand for used cars fails to keep pace with the demand for new cars, the quantity in used car stock rises, residual values fall and problems arise for manufacturers, franchised dealerships and banks and leasing companies.'
He added that the booming European fleet sector was likely to create greater volatility in residual values as higher volumes of ex-company cars arrive on the European used car market.
His comments followed official figures from the ACEA (European Automobile Manufacturers' Association) showing half year sales of 8,004,609 new cars in the European Union, 1.6% up on 1999's first six months sales of 7,875,446 – and 1999 ended as a record year for the European motor industry at 14,645,385 registrations. But these international figures mask very different national performances, with booming markets in Ireland (up 43.7%), France (up 17.4%), and Greece (up 15.4%) offsetting sharp declines in Germany (down 11%), Denmark (down 21.2%) and Portugal (down 6%).
The ACEA attributed the poor German results to unusually high sales during the same period of 1999, a lack of new models, an increasing focus on the used car market, and 'the fact that economic growth is mainly driven by exports rather than by domestic consumption'.
In Portugal, increases in interest rates have weakened consumer confidence, according to ACEA, while higher car taxes in Denmark from January 1 have damaged Danish new car sales.
Despite record sales in France, the Comite des Constructeurs Francais d'Automobiles attributed the phenomenal 75.4% increase in sales in June compared to the same month of 1999, to the end of the 'millesime' - the model year reference for new cars.
The removal of this distorting factor boosted the May and June markets in France, and with consumer confidence running high the CCFA is now forecasting full year figures of 2.3 million registrations. French manufacturers are among the best performing on the European market, with Citroen increasing its European sales by 14% to 425,524 registrations during the first six months of the year (helped by the new Xsara Picasso), and Peugeot recording a 12.1% increase to 630,961. Renault remains the premier French brand, however, recording 2.1% growth to 880,552 sales. Overall, Volkswagen Group remains the pre-eminent manufacturer in Europe with 1.5 million sales, although it took strong performances by SEAT (up 9.6% to 238,401 sales) and Skoda (up 16% to 109,632 sales) to offset a 7.6% fall in VW sales (down to 886,461). Ford has already announced a new strategy to counter its weak performance that saw its 849,365 sales account for a European market share of just 8.6%, behind Opel/Vauxhall at 10.5% with 862,605 sales.
And Toyota served notice of its plans to increase its penetration of southern European markets, increasing its sales in Italy by 89% as part of a general 24% increase in European sales to 299,519 units. (August 2000)