Fleet Europe — 2024-07-30
Automotive Industry
New car registrations in Europe will hit 13.1 m this year, predicts Dataforce. That’s up 2.2% over 2023 and growth will accelerate in 2025. But there is potential trouble ahead.
Let’s start with some good news. In 2023, new car registrations in Europe were up by 13.6% year on year, reaching a total volume of 12.9 million units. High volumes were due to a significant order bottleneck, and continuing high demand.
However, demand is now becoming a problem, with consumers putting off buying a new car due to the rising cost of living. To prop up sales, manufacturers and dealers are having to rely in discounts, leasing offers, and tactical registrations.
Helped by those measures, new car registrations will continue to go up for the current year, but at a much slower rate: by 2.2%, to 13.1 million units.
That figure still falls well short of the thriving new car market in 2019, the past pre-pandemic year, when 15.9 million new cars were registered across Europe. Dataforce doesn’t see the market regaining that level anytime soon.
“The industry must prepare for long-term lower unit sales and a more competitive environment”, says Benjamin Kibies, Senior Automotive Analyst at Dataforce.
One additional reason for that gloomy prediction – apart from declining consumer appetite – is the ramping up of CO2 requirements, as demanded of the OEMs by the EU. In order to achieve fleet-wide target of 93.6 grams of CO2 per km by 2025, OEMs will have to sell an average of 23% of BEVs, and 8% of PHEVs.
This will push OEMs towards cutting promotions on ICE vehicles, and redirecting their promotional attention to electric vehicles. Although this will have a negative impact on overall new vehicle registrations, Dataforce still sees those go up by 4.1% in 2025, to 13.7 million units. That too, of course, is still well below the 2019 level.
And now that we’ve mentioned EVs: What’s going on with this particular segment? A few observations: