Europe 2012, a year to remember?

This year has been a rollercoaster ride for the European automotive market, just as we forecast it to be. With a few days left until the year end, the problems of 2012 can easily be summarised by one chart. 

Whilst you need to also account for imports and exports, with sales well behind production and production massively behind capacity 2012 was always going to be about survival of the fittest. Throughout the year, discounting continued to rise, and self-registrations have been as high as 35 per cent across some European markets. 

With the pain being felt in sales of passenger cars and commercial vehicles industry infighting has been rife. There were calls for a unified approach to capacity cuts which met with

resistance from both German and Korean quarters; accusations of product dumping and a discounting ‘bloodbath’, with some brands cited as doing more than 50 per cent self- registrations in some countries; threats by Volkswagen to pull out of the ACEA; and challenges to CO2 tax calculations, with a clear split between premium German brands and the French and Italian ones who typically producing smaller models.

With big incentives on offer this year, especially for pre-registrations to try to hold up new vehicle sales, this also affected the value of younger used vehicles. Whilst the knock-on effect of declining new car sales was the continuing decline of the car parc of one-to-five year old vehicles meaning fewer used cars in the market. With more people downsizing the demand especially for some smaller premium models came close to exceeding supply.

The only exception to all of the gloom was the UK which is set to end the year 1% up overall and 5% up on passenger cars.