The EU new car market will shrink by at least a quarter in 2020

The EU new car market will shrink by at least a quarter in 2020

The situation on the EU new car market improved slightly in May compared to April at a very low level. After the number of new registrations fell by three quarters in April, new registrations “only” shrank by around half in May. There is also a positive trend in Austria: after a decline of 65 percent in April, sales fell by 34 percent in May. Across Europe, the countries with the toughest containment measures recorded the greatest declines: In Great Britain, Ireland and Spain, new registrations each fell by 70 percent or more. Gerhard Schwartz, Head of Industrial Products at EY Austria, sees a slightly positive trend overall: "In most European countries, the restrictions were relaxed in May, and public life is now slowly getting back on track. This easing is also reflected in the new registrations." For the month of June, Schwartz expects the situation across the EU to further ease and a decline of around a third compared to the same month last year.

Electric share is increasing again
In May, the positive trend in new registrations of electrified vehicles gained momentum again - after a weak phase in April. In the top 5 markets in Western Europe - Germany, Great Britain, France, Italy and Spain - sales of purely electrically powered new cars rose by 25 percent in May, and new registrations of plug-in hybrids even rose by 59 percent - in each case compared to the same month last year. The largest increase in new registrations of electric cars was registered in Italy (plus 55%), and the highest electric car sales in absolute numbers were in Germany (5,578 vehicles). In Austria, sales of electric cars only rose by five percent, but new registrations of plug-in hybrids rose very sharply: by 256 percent. Particularly strong growth in this segment was also observed in several other markets in May: in Germany, France and Italy, the number of newly registered plug-in hybrids more than doubled. Only Great Britain clouds the statistics with a minus of 65 percent. Most plug-in hybrids were sold in Germany in May (6,755 vehicles; Austria: 498 vehicles).

Fat minus for petrol and diesel engines

However, massive losses were recorded for new petrol and diesel cars: in the top 5 markets, sales of petrol vehicles fell by 65 percent and in Austria by 42 percent. Diesel vehicles recorded a decline of 62 percent in the top 5 markets and by 38 percent in Austria. The market shares of electrified new cars increased accordingly: In the top 5 markets, the market share of electric cars more than tripled from 1.1 to 3.4 percent (Austria: from 2.3 to 3.6%), while plug-in hybrids grew from 0.8 to 3.0 percent (Austria: from 0.5 to 2.5%). Together, electrified models had a market share of 6.4 percent in the top five markets in May (previous year: 1.9%). In Austria, the market share of electrified new cars was 6.1 percent in May, slightly below the average for the top 5 markets.

Outlook 2020
So far this year, the EU new car market is 42 percent below the level of the same period last year; in Austria there has been a decline of 42 percent so far. Across the EU, we can expect a decline of at least a quarter in the current year, says Schwartz: "We will have to deal with massive overcapacity in Europe in the medium term, because the European economy will still be struggling with the economic aftermath of this crisis in the coming year - even if the pandemic is over by then. High unemployment, bankruptcies and falling corporate profits will have an impact on the new car market for a long time to come. So the crisis is far from over."