Fleet News

European new car sales end on a high

A highly unusual year in new car sales has ended on a high for most manufacturers, but there are growing signs of uncertain times ahead, according to analysis by Jato Dynamics.

While the Volkswagen Golf can comfortably claim the crown of Europe's best-selling car with a 23.9% sales rise compared to 2008, it has done so in a market artificially stimulated by unprecedented government and manufacturer incentives that have maintained demand over the past 12 months, say Jato.

"The figures we've seen over the past year tell a story of how incentives have driven certain markets through these tough times - but this story is not necessarily set for a happy ending," says David Di Girolamo, head of Jato Consult.

Jato analysis shows a strong finish in December for France, Great Britain, Italy and Spain, all of which recorded double digit percentage sales increases.

However, its analysis also shows a significant shrinking of December sales in Germany (-4.6%), the one major European new car market to have closed its scrappage incentive scheme.

It is supported by the situation Jato has analysed in Eastern Europe, where a lack of scrappage schemes and rising VAT has significantly restricted new car demand.

For example, Latvia and Lithuania ended 2009 down 72.9% and 66.2% respectively whilst even those more aligned to Western demographics and consumer spending patterns, such as Finland, Denmark and Hungary, have seen demand drop between 20% and 60%.

"The concern is that these market conditions could be reflected in Western Europe in 2010," suggests Di Girolamo.

"For example, VAT is already rising in the UK and the remaining national scrappage schemes are scheduled to close in the early part of this year. This makes for uncertain times in new car sales across some of the key Western European markets."

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