EU new car market: Coronavirus is likely to lead to drastic declines in March and April

EU new car market: Coronavirus is likely to lead to drastic declines in March and April

The new car market was in the red in February: new registrations fell by 7.4 percent across the EU, after having already fallen by 7.5 percent in January. In Austria the minus was 10.9 percent in February. Gerhard Schwartz, Partner and Sector Leader Industrial Products at EY Austria, expects significantly more massive declines in the European car market in the current and coming months: “March will be very weak, and in April the new car market will practically come to a standstill.” In the particularly affected countries in which public life was severely restricted early on due to the corona crisis - above all Italy, France, Austria, Spain and, with a little delay, Germany - the greatest losses will be seen as early as March. “The new car market is coming to a standstill these days, and the automotive industry – manufacturers, suppliers and car dealers – is facing unprecedented challenges,” warns Schwartz: “As with other sectors of the economy, there is a risk of drastic losses in sales in the coming months.” On the one hand, potential buyers are afraid of going to the car dealership, and on the other hand, there is an increasing lack of supplies of new cars and spare parts after several car companies have already announced factory closures, says Schwartz: "Demand is collapsing, it is becoming increasingly difficult to maintain the supply chains. Production is stalling."

“The main reason for the decline in February was the high number of early new registrations at the end of the previous year,” says Schwartz. “The vehicles that were pushed onto the market by manufacturers at the end of the year were missing from the statistics in January and February.” Due to the EU regulations on CO that apply from January 1st, 2020₂-Emissions, the manufacturers had brought forward new registrations on a large scale, especially in the SUV and off-road vehicle segment, so that these vehicles would not have their CO emissions from January₂-debit balance sheet.

EY at a glance:
EY is one of the leading auditing and consulting organizations in Austria. The company employs over 1,000 people at four locations and achieved sales of 160 million euros in the 2018/2019 financial year. Together with the approximately 280,000 employees of the international EY organization, EY serves customers all over the world.