Home > Europe, STRATEGY > Strategy: Will the European new car market ever grow again?

Strategy: Will the European new car market ever grow again?

Car-free Paris, France. As the whole industry is getting ready for the Frankfurt Auto Show, the European new car market is evolving at its lowest level in 20 years in 2013. Spain has had its weakest month of August on record, and in France we are looking at the lowest monthly sales figure in 37 years… Some insiders,...

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Categories: Europe, STRATEGY
  1. December 6th, 2013 at 08:49 | #1

    Interesting article Matt. The saturation level that you are talking about is actually the 15 million units that were reached in the late 90’s (some 15.1 million units sold in 99, talking just Western Europe and PCs, no LCVs included). The 12 million units that we have now is a consequence of those high levels in previous years (indeed, the market is saturated!) and obviously, a consequence of the economic crisis. I bet the WE market will rebound somehow (13.5 million units in 2-3 years?) but it will not reach the late 90’s / early 00’s levels anymore, for the reasons you quote in you article (improving public transports, among others).

  2. Steam
    November 18th, 2013 at 23:21 | #2

    German carbuilders expect recovery of the european market:

    http://www.automobil-produktion.de/2013/11/autoindustrie-sieht-zeichen-fuer-langsame-markt-erholung/

    I hope the translater helps … ;)

  3. daryoush
    October 29th, 2013 at 06:01 | #3

    It’s to do with fashion. Young people getting married later and moving to the big cities, the centre of town and the inner suburbs. Increasingly people are living in flat shares without access to car parking and commuting to work at employers that are located in the centre of town, so a car becomes an expensive weekend extravagance. Also since the 80s and the strict drink driving laws that came in about then a car has meant being unable to socialise after work, which is boring, huh? Cycling is cheap and keeps you fit, as well as practically screaming alt middle class. Car rentals are booming. As well as the lifestyle issues you could also look at cars themselves, manufacturers have become conservative in the extreme and beyond the kitsch mini and contrived 4x4s there is little under £20,000 aimed at lifestyle consumers, the Twizzy seems way too expensive, BMW/Mercedes/Audi have capitalized on the fact that no one wants MOR anymore, but even in Europe their sales are so high they’re on the edge of losing their cool, alternatively just as with retail some of the super cheap manufacturers are also doing well.

  4. Can Ceyhan
    September 2nd, 2013 at 20:02 | #4

    You are definetly right concerning population decline. Just speaking for EU; (28 countries, population 507 millions by today); lets say it will decrease to 450 million in near future. According my forecast of 1 car for 30 people per year; annual sales should jump to 15 millions. Europe is large, population is aged, market is mature, however Central and Eastern (even some Southern) markets are not filled up yet. That was my point.

  5. Can Ceyhan
    September 2nd, 2013 at 06:54 | #5

    Matt; the answer of your question may be hidden elsewhere than public transport. Take Germany as an example: Advanced public transport and high car sales go hand in hand. But what is currently happening in Greece? The opposite.

    I suggest not to focus on public transport but on following ratios of any particular country or continent:
    1) gdp per capita
    2) car sales per capita
    3) average income / bottom car price

    In other words:
    You should already have in hand figures of Germany population in 2013 divided to car sales in Germany in 2013. Please do the same for Europe or for the World.

    Without exception all economies will grow up soon or later regardless which part of the earth they are located. It is natural fact of human development for thousands of years.

    Therefore within this century we may see;

    In an average country: 1 car to be sold per 30 people per year.
    In a well being country: 1 car to be sold per 20 people per year.
    In a spoiled country: 1 car to be sold per 10 people per year.

    Just please check total population of `Europe` you mentioned in this article. And then divide in to 12 millions of cars which you are worried of saturation. It maybe around 40 or 50; I can not guess right now since I don`t know your Europe. But once you find out its total population; you will see that even Europe has a way ahead to improve.

    • matgasnier
      September 2nd, 2013 at 08:01 | #6

      Hello Can,
      Many thanks for your input.
      This is not as simple as cars sold per people per year unfortunately. Plus the population of Europe is going to actually decline soon. So the “economy growing being a natural fact of human development for thousands of years” has happened with a world population booming and we are now facing a different situation. For example, the German population has already started to decline and sales figures reached at the start of the nineties (4 million units in 1991!) seem almost unreachable anymore.
      Best,
      Matt

  6. Laurent
    August 29th, 2013 at 18:05 | #7

    Like Ian, in France country, car is a necessity because buses are nearly not existing. Even at 45 miles from Paris or 15 miles from Disneyland. I do like driving, and having a car.

  7. PaulGe
    August 29th, 2013 at 01:21 | #8

    The car renting system in Paris is called Autolib’ and not Carlib’

    • matgasnier
      August 29th, 2013 at 04:21 | #9

      Thanks Paul! Amended now.
      Best,
      Matt

  8. Steam
    August 28th, 2013 at 23:59 | #10

    I expect the european to recover quite soon. The declining of economis seems to stop since economy was growing again in the second quarter of 2013.

  9. 8man
    August 28th, 2013 at 16:58 | #11

    So Europe wants to buy fewer cars ? So the GDP of Europe will never grow again, more unemployment, less money and so forth: car industry creates thouands of jobs and indirectly too, the bicycle industry is third world stuff, but Europe and the greens and the old generation of hippies wants to become third world. Europe should build many suburbs, US style sprawl which contrary to opinion is good for the economy, of course, home prices would decrease too, and so forth, but Europe is an old continent, old, won’t be going anywhere anymore…

    • matgasnier
      August 28th, 2013 at 19:40 | #12

      Hi 8man,
      Don’t forget less sales in Europe doesn’t automatically mean European manufacturers will be in trouble, as many of them (including Volkswagen) already sell more outside Europe than they do inside.
      Cheers,
      Matt

  10. Ian
    August 28th, 2013 at 16:08 | #13

    Interesting article, I am British and originate from Shropshire in the North West Midlands of England, this is a very rural county and fairly sparsely populated, there are only two towns over 20,000, if you live outside these and you do not live on a train route you have to either depend on the local bus service (virtually non-existent in many areas), or a car. In rural areas all over the UK, especially remote areas of Scotland, Wales and also England a car has become a necessity for going to work, taking the children to school, shopping etc. I have moved to South East of England, the situation is totally different, you can get anywhere within the region by bus or train, very frequent services for both and of course
    London has a fully developed underground (metro system) and a light railway. Some cities like Manchester have reintroduced trams, the West Midlands has a light railway system, Newcastle a Metro system, there are also various incentives to use bikes etc. British roads are solid with traffic, another 2.2 million new cars being sold this year,we are a small country with a large and increasing population, we are running out of space, although I love and have always loved cars, something needs to be done to reduce our dependence on the it. The government is at last are trying to make the country more cycle friendly, in the US (and other countries) they have car sharing schemes, I am sure if introduced here that would help, there is a school near where I live, you see parents taking their children there in big four wheel drives, Land Rovers, BMW etc., this cannot be good for the environment. It has been predicted by many experts that the population of the UK will overtake that of Germany within the next few decades, which means even more cars, a frightening thought, sorry to go on, but action needs to be taken.

  11. Andre Machado
    August 28th, 2013 at 12:08 | #14

    Very interesting text indeed.
    Personally, I think the north american model (Each one commuting with his/her own car)
    is not sustainable from any point of view, maybe not even from the economical(Let´s not forget the impact traffic jams have on the economy). And if my point is wrong we should ask ourselves is the economy more important than our quality of life(clear air, less time lost commuting…)?
    I wish my country had good public transportation like western europe and people could
    live well without a car. I recognize, though, that the american model is appropriate for their urbanism, but the european one is the one I like most.
    Anyways, I think european car sales will decrease slowly in mid-term because of the same reasons the text talks about.

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