Light and shadow on the car market

Light and shadow on the car market

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The EU new car market recorded enormous growth in March 2021, with an increase of 87 percent - but only compared to the extremely weak month of the previous year. February was all about the Europe-wide lockdowns. Compared to the pre-crisis year 2019, there is still a significant decline in new registrations of 16 percent. So you are below where you were two years ago. “The hoped-for recovery in the EU new car market is still a long time coming,” says Gerhard Schwartz, Head of Industrial Products at EY Austria. “There are tentative signs of recovery but no trend reversal; new car sales are still well below pre-crisis levels.”

Below 2019 levels

Compared to the same month last year, all major European markets recorded high growth figures - in Italy sales even increased sixfold. In Austria, the new car market grew by 177 percent. However, the comparison to March 2019 shows double-digit percentage declines for all major markets. The situation will remain critical for the time being. Things are only likely to start looking up again by the middle of the year: "The great hope is still that the vaccination campaign will lead to a normalization of social and economic life from the middle of the year. It is to be hoped that the enormous backlog demand will also bring with it a sharp increase in demand for new cars. Then sales figures should return to those before the crisis," says Schwarz. However, it is unclear what lasting structural damage the pandemic has caused and what the new normal will look like in a post-Corona period. "Mid-term economic forecasts are currently subject to enormous uncertainty. This also applies to forecasts regarding the new car market." 

Electric growth driver

While sales of traditional combustion engines in the five largest markets in Western Europe (Germany, Great Britain, France, Italy and Spain) only increased by 36 percent in March compared to the extremely weak month of the previous year, new registrations of electrified new cars (electric and plug-in hybrid) shot up by 221 percent, and their market share almost doubled from 8.1 to 15.3 percent. Almost every seventh new car in March was an electric car or a plug-in hybrid. In Germany even one in four. The combined market share of pure combustion engines (petrol and diesel), however, shrank from 83.1 to 66.8 percent in the top 5 markets. In Austria, the share of gasoline and diesel cars also fell significantly from 80.6 percent in March 2020 to 65 percent in March 2021. This means that Austria is already slightly below the combined values ​​of the top 5 car sales markets in Western Europe.

Austria is becoming Stromerland

Compared to the same month last year (March 2020), there was a sales growth of 164 percent for electric cars in the top 5 markets, after only 43 percent in February. Austria was able to achieve above-average growth of 354 percent in electric cars compared to the top 5 markets. For plug-in hybrids, the growth rate (compared to the same month last year) rose from 146 percent in February to 308 percent in March. Here too, Austria is well above the average of the top 5 car markets with an increase of 504 percent. “Plug-in hybrids in particular are extremely popular; the growth momentum in this vehicle class is twice as strong as that of purely electric cars.” He expects that the electric segment will continue to grow strongly in the coming months: "The growth in electric cars and plug-in hybrids is remarkable - this is ensured by considerable government support measures as well as the increasingly attractive models. Numerous new electric cars and plug-in hybrids have also been announced for the current year. Customer interest is and remains very high."