(Observer Network News) The European new car market finally resumed growth in August, ending a 13-month continuous decline, but according to Bloomberg analysis on the 16th, this is only a temporary respite. Today, record inflation is eroding consumer spending, and an unprecedented energy crisis is putting potential buyers off the list.
Screenshot of the Bloomberg report
According to the report, the number of new cars registered in the European Union, the European Free Trade Association (EFTA, including Iceland, Norway, Sweden and Liechtenstein) and the United Kingdom in August increased by 3.4% year-on-year to 748961.
New cars registered in the EU from August 2021 to August 2022 Source: Bloomberg
The latest data released by the European Automobile Manufacturers Association (ACEA) shows that the number of new cars registered in the EU in August increased by 4.4% year-on-year to 622821.
New cars registered in the EU from September 2021 to August 2022 Screenshot of the official website of the European Automobile Manufacturers Association
However, it is worth noting that the August data growth is based on a low base in the same period last year, and overall sales are still far below the pre-COVID-19 level.
The European Automobile Manufacturers Association said all major EU markets contributed positively to growth in the region, with Italy gaining the most (9.9%), followed by Spain (9.1%), France (3.8%) and Germany (3.0%).
Among the major car manufacturers, the German Mercedes-Benz Group performed the best, with sales up 16% from the same period last year.
As some supply chain constraints, such as semiconductor shortages, begin to ease, European automakers are seeing the light of improvement, but they are still unable to withstand the shadow cast by runaway inflation and global economic slowdown on European auto sales expectations.
Bloomberg analyst Gillian Davis analyzed that high inflation, rising interest rates, falling consumer confidence, coupled with the improvement of the reliability of new cars, have extended the cycle of consumers wanting to upgrade to some extent, which may challenge the potential car purchase demand in 2023 and beyond.
Zwickau, Germany, a car at Volkswagen's electric vehicle plant
Germany, Europe's largest automotive market, has been urging industry to reduce natural gas consumption in recent months. German Economy Minister Robert Habeck said industry has been working in part to improve process efficiency and reduce production by switching to alternative fuels such as oil, and that some companies have even "completely shut down."
Energy costs and rising interest rates are "dissuading" car buyers, and earlier this month the German federal government announced a 65 billion euro (about RMB) consumer assistance program that includes a 1.5 billion euro discount on public transport and a 1.7 billion euro tax break for 9,000 energy-intensive companies to help consumers hit hard by soaring inflation and rising energy prices.
But at the same time, the ECB is still likely to continue to raise interest rates sharply despite the high fever of inflation. The final data released by Eurostat on the 16th showed that the inflation rate in the euro area in August reached an annual rate of 9.1%, higher than 8.9% in July. Inflation in the euro area was just 3.0% in the same period last year.
Olli Rehn, a member of the ECB's governing board, said that the risk of the euro area's inflation outlook is skewed to the upside, the risk of a recession is increased, and the ECB will continue to raise interest rates in the future.
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