European car market picks up


The annualized sales rate (SAAR) of the Western European auto market rose to 13.1 million units/year in December from 12.2 million units/year in November. This was the strongest performance of 2022 and was helped by a rush to register BEVs and PHEVs in some markets before government incentives changed. In terms of monthly raw registrations, December 2022 was 16.5% YoY with 1 million registered units. However, overall sales volume in 2022 was 4.1% lower than in 2021, highlighting the intensity with which supply constraints have hampered market performance.

Europe’s car market revived in December

Auto sales in Western Europe are estimated by LMC/GlobalData at 10.15 million units in 2022, down 4.1% year-on-year. The major markets all saw largely flat or declining new car sales in 2022. German car sales rose 1.1% to 2.65 million; the UK car market fell 2% to 1.61 million; the French market fell 7.8% to 1.53 million; Italy’s car market fell 9.7% to 1.32 million; and Spain’s auto market fell 5.4% to 813,000 units.

With the arrival of 2023, analysts at LMC/GlobalData expect supply constraints to ease but also warn they will continue to dictate vehicle sales as potential buyers will continue to face long waits for new vehicles.

Although underlying demand is far in excess of what OEMs can deliver (as evidenced by backlogs), demand conditions are themselves deteriorating as Western Europe enters a recessionary phase in the first half of 2023. Households continue to face pressures from higher prices and increased financing costs, which will affect their appetites to purchase large ticket items. This increases the risk that weakening demand will soon affect vehicle sales if the macroeconomic outlook deteriorates.





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