France contended with yellow shirt pressure, though still managed impressive year. Italy also positive but changes to fringe benefit tax coming in 2020, while Spain’s total market was slightly negative for 2019 but True Fleets still shone through brightly with a + 5.8%.
With 2019 in the rear-view mirror and fading fast we still wanted to bring our look at what happened in 2019 within the EU-5 but also to bring in January, as 2020 has certainly not started the same as in 2019.
France automotive market also had a great year, registering 2.21 million new (passenger) cars and from a total market perspective managing its best year since 2010. That came despite the ongoing “Yellow vest” protests which spilled into 2019 and a falling business sentiment. The commercial channels showed some resilience and despite the drop in Private registrations of 6.7% True Fleets managed a plus of 13.6% almost making up entirely for the Private volume loss. RAC remained almost equal to 2018 with just 257 registration missing from the 2018 total but seemingly it was Dealers and Manufacturers which tipped the market back into the black as they increased by 13.2%. Interestingly, no less than 12.1% of the total registrations for this channel came in December which historically is not a strong registration month. Our French outlook for 2020 is certainly more subdued than 2019 and January 2020 has borne out some of this conclusion dropping by 13.4% in comparison to January 2019. Not surprisingly each of the market channels took a hit beside one. Private registrations were down by 24.2% and RAC seemingly having an equally torrid time down by 20.0%. True Fleets faired a little better but still dropped by around 1600 registrations, while Dealer and Manufacturer increased by 7.7%, obviously trying to compensate a little for the retail channels.
Looking at the top six premium brands in January we see that only the home brand DS managed a positive month on a total market base. From a German OEM viewpoint Mercedes, down by 42.9%, had the worst month in negative growth but also in term of volume loss from all the top six. Looking at the RAC registration of those premium brands, only Audi increased their volume (+ 186 units) over January 2019 while Mercedes, DS, BMW, Volvo and Mini all dropped by double-digit rates.
For Italy, the year 2019 really does depend on a matter of perspective. The Italian market sees a healthy number of imported cars which last year saw a double-digit growth while genuine registrations (i.e. those vehicles that never had a number plate abroad) increased fractionally. Either way we saw Italy register more cars than in 2018 and if you take those imported cars into account it was the best result seen on a Total market view since 2009!
For the purpose on consistency we will take all the new car registrations into account, meaning the Italian market finished on 2.12 million registrations for 2019 or an increase of 2.8%. Each of the individual channels achieved growth other than Dealers & Manufacturers (- 9.3%) with True Fleet up by 8.0%, the Private Market seeing a 4.0% increase and the RAC channel a 4.3% bump. The change to the fringe benefit tax for company car drivers will come into effect in July 2020 with the final draft being a little less severe than some of the first proposal drafts. Nonetheless, companies will seek to bring their registrations forward into the first half of the year. Therefore, True Fleets posted an increase of 5.5% over January 2019. Regarding the other market segments, RAC was up by 19.7% or almost 2800 registrations while the Dealer and Manufacturer channel was pretty steady with a sedate 1.9% increase, however the Private market was down significantly with 14.8% decrease.
In January for the Top 6 True Fleet Premium brands, we see both significant highs and lows from two OEMs, while the rest share more sedate movements both positive and negative. Audi was the significant winner picking up by 38.9% over January 2019. Home grown Alfa Romeo took the hit contracting by 32.4%. Mercedes and Land Rover each had pluses of 7% (7.3% and 7.9% respectively) while Volvo remained stable with – 0.3% and BMW dropped by 9.9%. From a fuel type perspective, Audi, Land Rover and Volvo appear to be pushing ahead with the use of Mild-Hybrid variants. For Alfa Romeo there are none while BMW and Mercedes models as mild hybrid versions were registered to a lesser extent when compared to their competitors. What is very clear is that Volvo are the ones pushing ahead with PHEV so far this year with 11.9% of their registrations using a Plug-In variant engine.
Spain was one of the markets that lost some ground in 2019 when you look at the total market figures, dropping by 4.3% in comparison to 2018 it finished on 1.32 million registrations. This was the first time since 2012 that the market had posted a negative result and the difference between those last two negative years stands in stark contrast. 2011 to 2012 saw a 13.2% drop, finishing on 705,000 registrations, while in comparison 2018 to 2019 it was the before mentioned – 4.3%. As described in one of our previous press release this result may have been more negative if not for the + 5.8% seen in True Fleets and to a lesser extent the RAC providing 0.6%. The Spanish market is expected to bounce back a little in 2020 especially with consumers looking to use the favourable taxation still available with correlated NEDC before the change in 2021 to WLTP. January’s registrations though have not set the market off to great start in 2020. Down by 8.2% for the Total market all channels contributed to the slide apart from True Fleet, once again. The Private market fell by 14.8% and marks the fourth straight month of decline, RAC did not fare much better with a – 13.3% and while we would expect Dealer & Manufacturer to compensate for the heavy Private decline it also contracted by 5.8%. This left True Fleet to shoulder the positives and they achieved a healthy + 9.6%, mostly the sub-channel of Leasing & LTR, but even Driving Schools contributed to the positive, increasing the registrations by 22.6%.
Looking into True Fleets top Premium brands, everybody but Audi took advantage and a slice of the channels uplift. Lexus produced a great result upping the registrations by 56.2%, Mini followed with a 22.3% increase and Volvo also managed double digits, just, with 11.0%. Mercedes and BMW registered 9.3% and 3.3% respectively. After a quick look into the fuel types we can see a few of the premium brands taking advantage of the CO2 climate with PHEV gaining more of a share of their registrations, though Lexus, for whom 100% of all registrations are Hybrid they are seemingly already in a very good position. Putting Lexus aside there does appear to be one OEM behind the rest in terms of PHEV or BEV over the last few years and that is Mercedes and given the January results so far, it will be interesting to see what happens over the current year as we move closer toward the 2021 CO2 targets.