Global Insight Perspective | |
Significance | The top five groups in Europe all posted sales declines during December, while Fiat and Toyota continued to make gains. |
Implications | Overall, Western European sales fell during the month by 1.2%, as VW, PSA, GM and Renault all saw sales slip. |
Outlook | VW finished the year on top with decent gains, but new entries from Toyota, Hyundai and Fiat could see the balance of power change in 2007. |
Western European passenger car sales dipped during December by 1.2% year-on-year (y/y) to 1,000,655 units, according to Global Insight forecasts. A large gain in car sales in Germany during the month, as consumers rushed to beat the January 2007 increase in value-added tax (VAT), was unable to overcome declines in Spain, Italy, France and particularly the United Kingdom, where changes to company car tax rules in 2006 meant that sales suffered from a high base comparison in the same month of 2005. Sales for the full year were up slightly from 14,537,732 units to 14,613,449, a y/y increase of 0.5%.
The top five groups in Western Europe all suffered declines to some degree during December. Volkswagen (VW) remained top of the sales chart for the month, but saw its y/y sales fall by 1.8%. However, this made little difference to the company's full-year sales, which were up 5.9% y/y. PSA Peugeot-Citroën, Ford and GM’s sales all finished December down, by 3.8%, 0.2% and 4.1%, respectively.
Western European Car Sales by Group: Global Insight Forecast (*) | ||||||
Dec 2006 | Dec 2005 | % Change | YTD 2006 | YTD 2005 | % Change | |
VW Group | 206,454 | 210,308 | -1.8 | 2,905,096 | 2,742,320 | 5.9 |
PSA | 124,465 | 129,329 | -3.8 | 1,939,394 | 1,985,498 | -2.3 |
Ford | 107,350 | 107,538 | -0.2 | 1,568,492 | 1,584,797 | -1.0 |
GM | 105,248 | 109,700 | -4.1 | 1,495,854 | 1,530,622 | -2.3 |
Renault | 76,385 | 97,573 | -21.7 | 1,264,612 | 1,422,857 | -11.1 |
Fiat Group | 70,396 | 64,843 | 8.6 | 1,115,330 | 962,181 | 15.9 |
BMW | 68,228 | 56,424 | 20.9 | 773,171 | 761,006 | 1.6 |
Toyota | 61,919 | 58,235 | 6.3 | 874,002 | 792,592 | 10.3 |
DaimlerChrysler | 61,192 | 61,708 | -0.8 | 908,948 | 906,610 | 0.3 |
Hyundai | 34,304 | 40,078 | -14.4 | 493,902 | 534,530 | -7.6 |
Top 10 Groups Total | 915,941 | 935,736 | -2.1 | 13,338,801 | 13,223,013 | 0.9 |
Western European Car Sales Total | 1,000,655 | 1,012,817 | -1.2 | 14,613,449 | 14,537,732 | 0.5 |
Source: Global Insight * Where official figures have not been released at the time of writing, best estimates have been used, as of 11 January 2007. | ||||||
Renault, however, saw the largest decline in absolute terms for the month, with sales falling 21.7% y/y to 76,385 units, while its full-year sales declined 11.1% to 1,264,612. A lack of new models during the year and an ageing model line-up, as well as a commercial policy to reduce sales to high-turnover fleets, combined to cause this decrease.
BMW posted the largest sales growth during the month, of 20.9% y/y, while the Fiat Group continued to impress with further gains in December, and it finished the year with sales up 15.9%. Toyota, which continues to seek growth in Europe, saw its sales rise again during December by 6.3%. This contributed to the over 10% growth posted by the company for the full year.
Outlook and Implications
VW sold the largest number of cars in Western Europe in 2006, although it faltered in the final month despite a 17% y/y increase in total car sales in its home market. PSA, which had been perceived to be turning the corner as regards its car sales following two months of increases, also suffered a sales decline in December, suggesting that a full recovery is still a little way off.
Fiat continued its strong sales run, thanks to impressive showings from its Grande Punto and Panda models. Fiat will be looking to maintain this momentum throughout the coming year with launches of its new C-segment Bravo in February and its new 500 A-segment competitor.
Renault will want to forget 2006, a year it had previously called ”transitional”. Although Renault anticipates this decline to continue during the first half of 2007, the company expects the release of the next-generation Laguna and Twingo to allow it to finish the year up slightly. With the release of a further 24 new models expected over the next three years, including entries in new niches such as the sports-utility vehicle (SUV) market, Renault will be seeking to improve its sales and market share in the coming years.
BMW enjoyed the largest absolute growth of all the groups in the region during December, with sales no doubt helped by the change in tax laws in Germany. Toyota continued to register sales increases during the month, which contributed to its 10.3% sales increase for the full year. The company is still targeting 1.2 million annual sales in Europe by 2008 (see Europe: 6 December 2006: Toyota Reiterates Ambitious 2008 Sales Target for Europe), but this will require impressive sales of its new Auris model, which has a sales goal of 150,000 units in the region, including Russia.
Although overall sales during 2006 remained flat, there were some winners and losers throughout the year, highlighting the competitive nature of the market. Should this trend continue during 2007, further model launches, particularly in the B and C segments from Toyota, Hyundai, and Fiat, will likely see the balance of power alter during the year.