Strong growth in new cars

Strong growth in new cars

According to the industry association ACEA, passenger car sales increased by 15 percent across Europe in October, after growth of only nine percent was recorded in September. In Austria, the growth rate climbed to 17 percent, after a decline of four percent was reported in September. All major markets except Germany recorded double-digit increases. In Germany, the expiry of government subsidies for commercial electric car purchases led to a slump in new electric car registrations, which also severely slowed the overall market.

However, new car sales remain well below pre-crisis levels: compared to October 2019, around 50,000 new cars were sold last month, meaning sales were five percent below pre-crisis levels. There has even been a gap of 20 percent over the course of the year so far. “It currently looks like the EU new car market will grow by around 16 percent this year; next year it will be more difficult to continue on this path,” says Axel Preiss, Head of Advanced Manufacturing & Mobility at EY. Economic weakness, high financing costs and significant geopolitical tensions will be the reasons why both private individuals and companies are likely to be reluctant to buy cars. Preiss continued: "In order to boost sales, some manufacturers have already started offering special financing, promotions and affordable special models. More will follow. Customers can be happy: there are discounts again."

In Austria, new electric registrations rose by 65 percent. The market share of electric cars also increased: from 12.0 to 14.2 percent in the EU, from 16.6 to 23.6 percent in Austria. Preiss emphasizes: "Many countries offer attractive subsidies for the purchase of electric cars. Where there is a lot of subsidies, a lot is bought. The subsidies are particularly significant in percentage terms in the lower and middle price segments." Above all, high prices, the range and an inadequate charging infrastructure would prevent stronger market growth in many EU countries. Preiss sees it as positive that more and more manufacturers are now announcing concrete models in the 20,000 euro range: "E-mobility has so far been primarily mobility for higher earners. In the important small and compact car segment, the range has so far been extremely clear. Now something is happening in the lower price segment too."