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Britain an island of growth as Europe car sales slump

August figures have confirmed that European cars sales have continued to decline. The statistics from the European Auto Manufacturers' Association show that sales across Europe as a whole were down 5% on the same month in 2012. This resulted in a total of 653,872 new motors being registered in August.

August figures have confirmed that European cars sales have continued to decline. The statistics from the European Auto Manufacturers' Association show that sales across Europe as a whole were down 5% on the same month in 2012. This resulted in a total of 653,872 new motors being registered in August. The UK was yet again the only country where sales rose, with growth of 10.5% on last year's August figure. The biggest losers were French company Peugeot, with a steep 18% drop in sales. The German marques didn't fare much better, with Volkswagen recording an 11% decline and prestige make BMW coming in with a 9.9% fall. The sales figures are compiled from the 27 EU countries in addition to nations in the European Free Trade Association. In the year to date, European sales total 7.84 million cars, which is the lowest figure since the European Auto Manufacturers' Association began collecting the data in 1990.

The UK has proved thus far to be impervious to the European decline, with new car sales rising for 18 consecutive months. This striking contrast is explained by IHS Automotive market analyst, Tim Urquhart, who commented: "Overall confidence is improving, especially among private buyers, as a result of the positive recent economic data. This bolstered confidence has combined with an ongoing very aggressive retail environment where dealers and manufacturers are offering extremely keen deals and incentives packages."

Mr Urquhart also suggested that the availability of low interest finance deals in the UK was proving to be an important factor in sales growth.

On the whole, the figures suggest the prestige car makers are doing rather better than the middle market manufacturers. At the other end of the scale, budget motor brands are also performing better. Hyundai, for example, saw only a 1.35 fall in sales this year. Their European boss, Allan Rushforth said: "What we're seeing right now in the European car industry is a squeezed middle. German premium brands are coming down through the market while Hyundai is moving up, making life very difficult for European volume brands rooted in the mainstream."

The news of the European decline puts the UK industry's growth and export success into an even more positive light. Whereas some years ago the industry seemed doomed, it is now expanding steadily. Exports to emerging markets like China have driven production but these figures show that the domestic market is also healthy.

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