Subdued growth in new cars

Subdued growth in new cars

The new car market in the EU continues to recover, but remains well below pre-crisis levels. According to the industry association ACEA, the number of new car registrations in the EU rose by twelve percent compared to February 2022, and in Austria it rose by eleven percent. Compared to February 2020, i.e. before the pandemic led to massive declines in sales, there is a decline of 22 percent for the EU, while sales in Austria are 24 percent lower than before the crisis. In 22 of the 27 EU member states, sales in February were below the February 2019 level.

“The recovery is progressing slowly,” says Axel Preiss, Head of Advanced Manufacturing & Mobility at EY. “However, we are still a long way from pre-Corona levels.” Fundamentally, conditions for the auto industry are improving, says Preiss: "The bottleneck problems with intermediate products and semiconductors still exist, but the delivery situation is significantly better than a year ago and is expected to ease further as the year progresses. There does not appear to be a deep recession, an acute energy crisis has apparently been averted for the time being and fuel prices are falling again. The starting position is therefore better than last year."

However, there are still significant risks and problems, especially the war in Ukraine, tensions between the USA and China and high inflation. The very high new car prices are also dampening sales, says Preiss: "Especially in Austria, inflation is still at a very high level, which also has an impact on purchasing intentions - especially in the price-sensitive small car and compact segments. As long as car manufacturers have a comfortable order cushion, they will try to keep prices high. However, falling incoming orders could mean that discount campaigns play a greater role again for some manufacturers as the year progresses." Overall, there is currently a lot to suggest that new car sales in the EU in 2023 will be well below the pre-Corona level despite almost double-digit growth, says Preiss.

In February, new registrations of pure electric cars (BEVs) in the EU increased by a total of 39.6 percent, around three times as much as the overall market. In Austria, growth of 61 percent was even registered. The market share of purely electric cars rose across the EU from 9.7 percent to 12.1 percent compared to February 2022, and in Austria from 13.1 to 19.1 percent. “The demand for electric cars is still greater than the supply, and government subsidies continue to play a major role,” emphasizes Preiss. "However, we see that growth is slowing somewhat compared to previous boom times. Sales of electric cars will continue to rise as the year progresses - but no big jumps are to be expected." Plug-in hybrids, on the other hand, are currently having a particularly difficult time. New registrations of this type of drive fell by seven percent across the EU in February compared to the same month last year; a total of seven countries recorded falling numbers of new registrations of plug-in hybrids. The market share of this form of drive fell across the EU from 8.6 percent to 7.2 percent.