New car registrations in Europe were down 18.3 per cent in February versus the previous year according to data from the European Automobile Manufacturers Association (ACEA). As the chart below shows the numbers have now been falling steadily since about April last year.
Perhaps most telling about February’s numbers is how much quicker registrations are falling in new European member states versus old member states. While in Western Europe the collective drop was some 17.3 per cent on the year, in new member states the fall was 30.3 per cent – the standout exception being Poland which improved on last year’s performance by 7.3 per cent.
The biggest fall overall came in Iceland, where new registrations were down 83.6 per cent. Germany, meanwhile, recorded an impressive 21.5 per cent growth mostly thanks to recent motor vehicle tax reform and a scrapping bonus instituted by the government.
As to which make-of-car was the least popular in Europe in February, that would be GM — whose sales were down 70.4 per cent versus the year below.
The numbers follow Thursday’s approval by the European Investment Bank of €3bn in loans to German, Italian, French and Swedish automakers, and a promise to approve a further €2.8bn in loans in April and May.
While certainly supportive, ACEA appears unconvinced the money will really be enough to help the sector’s financing problems. They note specifically how it is credit availability that will determine success due to the industry’s high dependence on loans both in manufacturing and assuring sales:
The EIB loans will contribute to meeting environmental requirements but are insufficient to confront the extraordinary economic circumstances. There is an immediate need for access to financing in general. “At the moment the financial markets are not functioning despite billions in government aid to financial institutions”, adds Hodac. Both vehicle sales and automotive manufacturing are largely dependent on credit and financing because of the capital-intensive nature of the industry and the relatively high purchasing price of the product.
What that largely means is that until credit availability is restored the EIB effort will at best be the equivalent of trying to keep a fully-loaded steam train from derailing by laying track just in front of its path.
Related links:
Negative car equity – FT Alphaville
EIB lends 3 bln euros to European automakers – Reuters