Asset Finance Pricing Review
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Europe: expanding opportunities Austria, Poland, Hungary, Romania
▼ Car subscription – getting the price right
▼ ExpertEye on the coming RV storm IntroductionIntroduction Fair shares?
Welcome to the latest edition of our Asset Finance Pricing Review, Car subscription services have attracted lots of attention – but relatively few Welcome to the sixth edition of Asset Finance Pricing Review, published in users. Hendrick Roosna, CEO of Fairown Finance, analyses how changes publishedcollaboration in associationwith Asset Finance with Asset International Finance and International Professor Colin Tourick. to finance models could give this market the push it needs to change customer attitudes TheAs in one all previous constant issues, in business we again and put political forward lifea host in 2019of articles has frombeen industry change, as leadershipinsiders that elections, serve to illuminate campaigns the morearound challenging climate changeaspects ofand asset Parliamentary finance Subscription has become a hot topic and direction for innovation for many. procedurepricing. The and, purpose of course, is to bring Brexit you negotiationsvaluable insights, have knowledge all combined and examples. to provide That is probably why plenty of car brands and OEMs have launched dailyIn any challenges company, there to how are thingsdifferent are stakeholders usually done. involved in pricing policy and various subscription programs: Volvo has Care; Land Rover has Carpe; Inexpecting the automotive sales and sector, finance we’ve to see been eye-to-eye living onwith every change issue foris the some stuff time. of fantasy. Mercedes offers Flexperience, and the list goes on. All of these programs This is especially true for businesses that operate internationally and have to take are designed with a similar end in mind, namely to discover how many Oneinto accountof the biggest the cultural, is the political, growing financial interest and in regulatorysharing cars, differences rather within than those owningmarkets. a Invehicle Car Wars outright. – reconciling For millennials, divergent views who onare manufacturer used to options auto financesuch customers would be willing to increase their monthly car budget in aspricing Airbnb (pages and 3-5),Netflix, Bryan paying Marcus, for regional an asset director based of VWFSon usage Latin rather America, than exchange for additional services and flexibility. Programs offer an app, ownershipCanada and makes Northern a lot Europe, of sense. offers But an interestingwhile it’s anperspective attractive on idea resolving for pricing related services, and the ability to switch between the manufacturer’s other consumers,disputes – and it’s one harder that doesn’tto see howinvolve auto leather finance gloves funders and a boxing and others ring! can available models. adapt to this new approach. In an article on page 3, our guest columnist There are many ‘levers to profit’ in every asset finance business but the one that While it’s an attractive idea, the concept looks like a hard sell because it’s Hendrickwill have theRoosna greatest takes impact a detailed on the bottom look at line how is changing car subscription your pricing services policy. difficult to imagine a large customer segment being ready to increase their canThis be is thepriced advice so ofas Professor to make Colinmoney, Tourick, as well management as attracting consultant headlines. and editor of monthly car budget. On the contrary, the average customer is seeking ways Asset Finance Pricing Review, in The pricing action plan for profit (pages 6 and 7). Roosna's fintech start-up, Fairown, is based in Estonia, just one of the to reduce costs, taking the pragmatic “I’ll-choose-a-car-subscription-when- emergingThere’s only new one auto topic finance (other than markets pricing in policy) central that and can easternclaim joint Europe. ownership Our of it’s-cheaper” view. If a car brand could design a subscription service at a leadthe most-difficult-aspect-to-get-right-in-asset-finance article (starting on page 6), shines a light on developmentstitle and that is setting in four price point that competed with loan and lease offerings, it would probably countries:Residual Values Austria, (RVs). Hungary, But it’s notPoland just a and matter Romania. for vehicle With leasing Poland and beginningdaily rental go viral. This attractive offer could change customer purchasing habits by tocompanies, challenge states the Big Dean Five Bowkett, who have technical traditionally director andheld chief the dominanteditor at market converting conventional loan and lease purchases to a new type of car share,EurotaxGlass’s. now is a Ingood his article time toSetting assess Residual how trendsValues (pagesare developing 8-10), he examinesin a the subscription. pitfalls and best practices and offers a unique perspective on how it matters for sampleOEMs too. of countries in the region. With new car sales on the slide in mature It’s a challenge, but providing more value for a lower price point should be markets, OEMs and lenders are looking further afield to bolster revenues, possible if we innovate with a leasing product rather more than ever before. particularlyPage 11 presents as these the resultscountries of our start last to Pricing invest Survey, in infrastructure which posed and questions boasts aaround mobile, how young, to pitch workforce pricing at for a level whom that having delivers a the car most is fast new becoming business anda Traditional car financing products such as loans and leasing, designed necessity.highest margins. As ever, the results surprised us. They may surprise you too or decades ago, follow an underlying logic that continues today. An issued perhaps confirm your prior thinking. Either way, get in touch and give us your credit should preferably be lower than the value of the car. The down Asperspective. ever, we also have ExpertEye’s report on residual forecasts and market payment is used to regulate the LTV (loan to value) metric to an acceptable summaries for the main western European market, which faced some Take part in our next survey level. Fees and interest rates used by the lessor for pricing include challenges in the past year and is by no means out of the wood yet. You operational and credit risks and bottom-line profit. Balloon payment size canWe’re read very more grateful details to everyone on page who 19. takes part in our surveys (you can do so at the end of the payment schedule is designed to be lower than the car’s Doanonymously enjoy and if your you like)comments because and they opinions always provide are always us with welcome. valuable expected secondary market value. In the case of an operational lease, the understanding and ideas. This time we’re asking: What is the primary consideration dealership is taking the responsibility of repurchasing the vehicle from the when your asset finance business sets its prices/issues a quote? You can take part here: http://bit.ly/bynxpr5. Gary Jefferies financier on a preliminary agreed price point. Sales and Marketing Director, Bynx By combining these variables, we have a price point that most of us are It’s always interesting to read how suppliers work successfully with leasing used to paying for having a financed car. However, one aspect to keep in companies and Kwik Fit GB is no exception. In an article, Kwik Fit GB fast fits deliver service excellence and financial savings (pages 12 and 13) Peter Lambert, mind is that the customer might consider purchasing insurance and paying fleet director, talks us through how the fast fits concept is delivering tangible results separately for maintenance and repairs. for leasing companies. Car subscription would skyrocket if there were a low price point available, We end this Pricing Review with the latest figures on changes in residual value and if you could have it even if you wanted to exclude services from the forecasts, SMR costs and lease rental rates across Europe (to January 2014) from monthly cost. benchmarking and research specialist Experteye.
And don’t forget to share your feedback with us and tell us what you’d like to see in future Pricing Reviews.
Gary Jefferies 2 Sales and Marketing Director, Bynx 3 From the risk perspective, the business model would look a little different because the levels of standard metrics for that type of offering would change. The creditor would need to finance a loan with a value that was higher than the collateral secondary market value. Which means that, if the customer defaulted, the expected losses could potentially be higher. Therefore, to fit into the risk models, these offerings should be aimed at customers less likely to default. Bringing the new variable “profit from the future transaction” into the traditional leasing formula would make it possible to define a price point that would change the way customers think about subscription. Thinking this way would also significantly increase customer lifetime value for the brand that is making the offer. Hendrick Roosna is the founder of Estonia-based Fairown Finance, and is a specialist in improving financial services with technology and data science. He describes the company as “a product subscription platform for electronics and other products customer needs and should replace in a planned manner. The secret sauce is a novel approach to residual value management, upfront discount from future purchases and deep integration with vendors. We establish partnerships with financing companies and brands, enabling customers to benefit from subscription services internationally.”
Bynx ad 11.18 AFI_Layout 1 28/11/2018 14:09 Page 1
So, what if we designed car subscription using the same components but in a different way? Just as the world’s most valuable brand, Apple, has done! They have created a predictable product renewal cycle. And, through the iPhone upgrade plan, they also motivate users to renew their device in a planned manner. Users don’t feel as if they’re paying any service fees or interest costs. All of those are covered by the brand, and financing is done simply by using traditional consumer loans The critical element in this type of set-up is a balloon payment at the end of the payment schedule. It’s designed to be higher than secondary market value because it includes a future discount for customers who are renewing their product in a preliminary agreed manner. The renewal terms can be decided through a dealership or directly with a brand, who would then know more precisely when the next car should be produced for this customer. Using an approach like this, and leveraging all the collected data, could help brands to stand out by providing additional measures on Innovative solutions for a mobility world environmentally conscious production. The transaction payment schedule is designed to make it financially beneficial and natural for the customer to renew the product a cycle agreed. But what if customers decide not to renew, as some may well do? In this case, the contract would continue as a loan until the liability was paid off.
4 5 bynx.com [email protected] +44 (0) 1789 471600 2018 % year-on-year Country new car sales difference
Romania 158,268 21.40%
Hungary 136,702 17.50%
Poland 531,843 9.10%
Austria 341,068 -3.50%
The Big Five
Germany 3,435,789 -0.20%
UK 2,367,147 -6.80%
France 2,163,059 2.90%
Spain 1,336,431 6.90%
Italy 1,911,662 -2.90%
Source: JATO Dynamics
2018 new car sales 4,000,000 Europe – heading east 3,500,000 3,000,000 Journalist Tom Seymour takes an in-depth look at the finance and pricing challenges facing the vehicle leasing and fleet markets in Central and 2,500,000 Eastern Europe with a particular focus on Austria, Hungary, Poland and Romania 2,000,000 While the Big Five (Germany, UK, France, Spain and Italy) traditionally dominate discussions about the automotive market in Europe, Central and 1,500,000 Eastern Europe is seeing a big resurgence in volumes.
A glance at the figures for Europe’s new car market last year shows the 1,000,000 size of the opportunities which are becoming available. Romania’s new car market led some of the biggest growth in Europe last year, up 21.4% to 158,268 units. Hungary and Poland also posted strong growth of 17.5% 500,000 and 9.1% respectively. 0 While there was some positivity within the Big Five last year, with Spain UK
posting a recovery of 6.9% in 2018 and France up 2.9%, Germany had a Italy Spain Austria France flat year and the UK sat at the bottom of the table with a market downturn Poland Hungary Romania of 6.8%. Germany Asset Finance International (AFI) has picked out the Polish, Hungarian, Eastern Europe The Big Five Austrian and Romanian leasing markets to track the latest developments and trends, as these countries are illustrative of how demand is growing. Source: JATO Dynamics
6 7 POLAND There have been five years of unbroken and very strong growth in the leasing“ market that have ensured that Poland is taking its rightful place as one of Europe’s leading markets. Paul Gogolinski, owner and director of Total Fleet Solutions ” and private persons in total) was acquired by companies belonging to PZWLP. Full service leasing companies alone recorded an increase of 17.5% in Poland over the previous year. However, user choosers are not widely popular among companies in Poland yet, excluding those in leadership positions, and the majority of companies still define the brand and specification of company cars. Poland is still in the emergence phase where many younger people perhaps cannot afford a new car on their own and so a company car, even in a more standard form, is still a bonus. As a result, senior managers are treated differently and frequently are able to choose if not from the entire market, then at least from a selected range. Company cars are still funded primarily via lease or full service leasing. The oland represents the biggest automotive The Polish leasing average corporate fleet customer is paying approximately 1500 zl (£300) a market highlighted for this latest BYNX industry has advanced th month with a maintenance included operational lease contract. For full pay- report at 531,834 units - dwarfing all other from 16 position in out leasing or a capital lease, the average is approximately 2100 zl (£420) P Europe to seventh markets by comparison. a month. between 1995 and It has a new car market up 9.1% and according 2017. Assets financed There are no formal statistics in Poland for how the fleet market is split to the latest Polish Leasing Association figures, by leasing as a between large corporate fleets, smaller fleets and SME businesses.The new leases moveables and immovables, percentage of total Paul Gogolinski, figures only show vehicles that were registered to a company, but there is totalled over €19 billion, an increase of 21.8% owner and director of no data available on the types of company. rose from 3.2% in 1995 Total Fleet Solutions year-on-year. to 29.3% in 2018. This was made up of cars (48.4%), heavy The leasing industry has grown by an average goods vehicles (23.7%), machinery, other inc. IT of 19% per year since 1995 with the steepest (26.3%), property (1.1%) and other (0.5%). growth in the years between 2004 and 2018. Paul Gogolinski, owner and director of Finance is by far the most popular method for Total Fleet Solutions,an independent fleet funding vehicles across Poland, accounting for management and rental consultancy based in around 70% of the market. Poland, told AFI the leasing market is in rude health. The PZWLP (Polish Leasing and Rental Association) has members from contract hire, He said: “There have been five years of full service leasing plus short and medium unbroken and very strong growth in the leasing term leasing segments in its membership. It market that have ensured that Poland is taking said PZWLP companies purchased a total of its rightful place as one of Europe’s leading 129,500 new passenger cars last year. markets. This means that almost one third (33.7%) of “After all, Poland is in the centre of Europe and new passenger cars purchased in 2018 were with a near 40 million population, and an EU from Polish fleets and a quarter (24.3%) of cars member state for 15 years - it is about time.” sold at that time in total (to institutional clients BMW i3 leads EV sales in Poland
8 9 The good times have arrived Another element Gogolinski sees as a potential threat for the future of a growing vehicle market Gogolinski acknowledged that with such strong growth over a sustained is Poland’s high road risk. Poland has one of The Polish Government has set period, there is likely to be a slowdown in the future. He said some the highest accident and road death statistics in expected 2019 to start showing signs, but so far there have been no ambitious plans that by 2025, Europe yet, Gogolinksi said, the vast majority of indications that the market is starting to turn. companies do not take the necessary actions to one million electric cars would be Gogolinski said: “This could be another strong year, although without the correct this. present on Polish roads. dynamic growth of previous years.” He said: “Driving on Polish roads, one can see GDP growth for Poland in 2019 is estimated at 4%, revised up recently from why the accident rate is high, in spite of an 3.8%. infrastructure that has improved beyond all recognition. Driving culture requires a wake up call.” The Polish government regulated “Poland is a country in renewal and the benefits are cascading down. Domestic consumption is This leaves a window of opportunity open for companies specialising in risk the leasing industry several years also high.” management, driver training and driver training. ago, meaning that clear rules were Gogolinksi said Poles have historically been established for the treatment of conservative in their spending, perhaps never Alternative fuels yet to take off quite believing that “the good times have tax and VAT. This drove growth arrived”. However, unemployment is at an all- The plug-in vehicle market is yet to take off in Poland. There have been some incentives introduced like being able to use bus lanes in city centres in leasing and especially in the time low and this is feeding into automotive demand. and some free parking. Gogolinski said these incentives are not particularly premium segments. useful in places like the capital Warsaw, as many drivers ignore traffic laws The Polish government regulated the leasing anyway and there is little enforcement to police the rules. industry several years ago, meaning that clear rules were established for the treatment of tax and VAT. This drove growth The Polish Government has set ambitious plans that by 2025, one million in leasing and especially in the premium segments. electric cars would be present on Polish roads. Gogolinski said: “At the current rate of development, it will take over a hundred years to achieve the target.” For example, in 2013, 4,857 new Mercedes-Benz passenger cars were registered to companies, while in 2018, that figure had risen to 19,475, in Last year, there were around 600 pure electric (excluding plug-in hybrid) increase of 300%. cars registered in Poland. After the first quarter of 2019, according to data from Polish research company the SAMAR Institute, 412 electric cars were Gogolinksi said low interest rates have also driven growth in the leasing registered (0.29% of total new cars registered in the first quarter). industry. “Interest rates continue at a low level and all the manufacturers now promote affordability based on monthly payments and dealer re- Innogy, a German based renewable energy company with a Polish division, repurchase offers. It means Poles can afford newer and better cars than recently bought 248 BMW i3s and this gave the German manufacturer the ever before,” he explained. lead on EVs in Poland in Q1 2019. The Nissan Leaf holds second place with 61 units and then the Renault Zoe with 46 units registered. The Jaguar I-Pace and Volkswagen e-Golf rounded out the rest with 23 units and 10 Used car oversupply units respectively. One of the big challenges facing the Polish market is the oversupply of used vehicles due to the continued success of the new car market. This Fleet technology ready for growth could leave the industry left to deal with a squeeze on margins as residual Like the plug-in vehicle market, fleet technology and services are still in values fall due to lack of competition in the market for stock. their infancy in Poland. However, there is a high skill source in the Polish Gogolinski said that some leasing companies in Poland are already IT sector and according to Gogolinski there is progress being made on struggling with their remarketing strategies due to “optimistic residual value innovative solutions on a small scale. estimates being replaced by harsh realities of a mature market”. Gogolinksi said many of the main players in Poland’s leasing industry are He also said Polish leasing companies have had to evolve their businesses “pouring investment” into Fintech and fresh developments are becoming quickly to match the speed of growth and change in the fleet market. more visible.
10 11 AUSTRIA
One thing is certain, there are many players in the market but there is also“ still a huge potential. Paul Gogolinski, owner and director of Total Fleet Solutions ” “I believe Poland could become a leader due to its young working population and willingness to adapt new approaches. “Car dealers have can submit finance applications electronically to several lenders or lessors in parallel, print and activate contracts. “Also, the presence of finance calculators, configurators and other convenience tools are common,” he pointed out. The HGV sector has adopted telematics as an industry standard in Poland, but it is yet to take off for passenger cars in the same way. Gogolinski said: “Senior leadership in each company has to sponsor the move to telematics and my experience is this is the problem – too many senior leaders just are not sufficiently committed to making the undoubted improvements that telematics can bring. “Having said that, there are benchmark examples of companies who see the full range of benefits and have adopted this as a key pillar in their nlike Poland, Austria saw a decline in the For 2018 the leasing strategies of safety, efficiency and professionalism. automotive market in 2018, down 3.5% quota (percentage “One thing is certain, there are many players in the market but there is also to 341,068 units. It’s the second largest of new registrations still a huge potential.” Uautomotive market picked out by AFI for this financed by leasing) report. throughout Austria was 40.3%. Despite the overall market being in decline, Wolfgang Steinmann, Austria’s total leasing industry has avoided The car portfolio also secretary general of the the downturn, posting growth of 11.1% in saw a slight rise. Association of Austrian Leasing Companies 2018 year-on-year to a record domestic new Currently there are volume business of €7.6bn. Automotive leasing 626,358 leased cars in represents over three quarters of the total leasing Austria with a volume of €11.5bn, which means market (€5.5bn) and grew by 2.1% last year. the number of contracts increased by 8.9%, while the volume climbed 10.7%. Wolfgang Steinmann, secretary general of the Association of Austrian Leasing Companies, Steinmann said: “Fleet management is still very said: “Automotive leasing growth last year was successful in Austria. an exceptional result, given the fact that the “Compared to the same period in 2017 the amount of new registrations decreased by 2.1% domestic new business volume saw a slight within the same time frame.” decrease of -0.4% to € 864m. The number of A total of 216,052 leasing contracts were signed contracts increased by 0.7% to 35,030.” in Austria last year. The average contract value amounted to €25,506, up 2.2% year-on-year.
12 13 HUNGARY The typical fleet vehicle has also developed alongside Hungary’s economy, from a Ford Focus, to more German saloons from BMW, Mercedes or Audi, much like the UK and German markets themselves. Toldi said: “The recession saw many corporates holding off vehicle replacements and extending contract terms. “In that situation there will always be a backlog of companies that will eventually need to replace vehicles. This has been giving the automotive market a boost.” The majority of Hungary’s fleet market is made up of SMEs that are using open ended finance lease agreements that gives them the option to own their vehicle at the end of the contract. Big corporate fleet accounts for around 30% of the automotive market in Hungary. These companies are using rental or operational lease to fund vehicles, they are keeping vehicles off the balance sheet by leasing vehicles and 99% of businesses are outsourcing fleet management to a third party company. SMEs in Hungary approach fleet much like a private customer and handle the management of their vehicles themselves. Toldi said: “Anecdotally, the Hungarian market is very much like the German market in that your status is very much determined by the car you drive and the prestige that comes with that. ungary is another highlight for the “There has also been an “It’s even more important than a house purchase. The company car has automotive industry in Europe with stellar upsurge in investment also become an important employee retention tool for companies in growth of 17.5% in 2018 to 136,702 volumes, rising demand Hungary as the job market has become very competitive. It acts as a good Hunits. Figures from the Hungarian Leasing for asset financing and way of holding on to employees by tempting them to stay with a premium Association show 13% growth across the a booming construction brand vehicle.” industry year-on-year in 2018 to a total value of industry that also help HUF 694 billion (£1.84bn). to explain the positive Balazs Toldi Leasing has also been given a further boost in Hungary over the last four head of commercial bank, market.” years after accounting rules changed to allow companies to write off VAT Fleet financing accounts for a quarter of the Budapest Bank on vehicles used for business mileage. This created a surge of interest for entire auto financing market in Hungary. After the extremely SMEs and corporates to write off tax through leasing their vehicles. Finance and operational lease together successful years of 2017 and 2018 represent a 40% share in terms of finance characterized by two-digit expansion, the The base interest rate has gone from highs of 6% back in 2010 in Hungary product type in the fleet market. Hungarian Leasing Association expects a more to very low, with the National Bank of Hungary recently holding its moderate growth in 2019, of roughly 10%. benchmark base rate to 0.9%. The big European leasing company players like LeasePlan, ALD Automotive and Arval are all Balazs Toldi, Budapest Bank head of commercial Toldi said these low interest rates have also been a boon to the leasing active in Hungary. bank, said: “The rise in the automotive market in industry, but that low figure also puts pressure on margins for the banking Hungary has been driven by positive movements industry. Tóth Zoltán, secretary general for the Hungarian in the economy across multiple areas, including Leasing Association, said the total leasing There is also the view that interest rates are likely to rise in the future. The positive move in construction, exports, investment industry’s performance last year was the best banking industry has been preemptive on this by offering fleets fixed rate and consumer spending across the board.” since 2008. offers to insulate them from any fluctuations in the base rate in the future. Toldi said investment in automotive from Zoltán said: “This development may account Thin margins in the leasing industry has led the Hungarian finance sector to BMW and Mercedes directly into Hungary primarily for the retail customers’ leasing- put a lot of focus and investment in digitalisation. for production facilities is also driving growth, assisted auto acquisitions and the corporate particularly in a country that favours German Toldi said: “The banking industry has seen operational costs go up, but customers’ automobile, fleet and commercial brands over French or Italian. interest rates stay low. This has meant there is an increasing focus on vehicle purchases. efficiency and the industry is looking at digitalisation as a solution.”
14 15 ROMANIA We’re not really worried about an imminent downturn or “recession in Hungary but at the same time we are closely watching what is happening in Germany Balazs Toldi, Budapest Bank head of commercial bank ” Zoltán agrees that the biggest challenges ahead for the Hungarian automotive leasing industry are a sharpening of competition and pressures on profitability where margins are tight. There is also the potential knock-on effect of a slow down in Germany and the UK’s automotive market. While the Hungarian new car market is currently in rude health, Toldi said there are close ties with big markets like Germany and the UK. The UK’s new car market is in decline and Germany is holding off from entering into an economic recession. Hungary makes vehicles for Suzuki, and Mercedes and BMW is building a €1 billion factory to build 150,000 cars a year. A downturn in Germany will have a knock-on effect on Hungary. Toldi said: “We’re not really worried about an imminent downturn or recession in omania’s automotive market has seen Dacia also took second Hungary but at the same time we are closely watching what is happening in some of the highest levels of growth in and third place in the Germany. Europe, up an impressive 21.40% last model rankings last “For leasing companies in particular, they will need to balance how they are Ryear to a total of 158,268 units. It’s the strongest year with the Duster remarketing stock that is coming off lease and they will be thinking about performance for automotive sales in 10 years. SUV and Sandero how they will be affected should the market turn.” seeing sales up by Romania has a strong automotive heritage as 50% and 20.7% the home of Dacia, the Renault-owned value Dr. Adriana Ahciarliu each to 12,900 units brand that has carved out a place for itself in Kyriakidis, founder and and 10,200 units general manager at developed markets like the UK. Dacia leads the respectively. Diplomat Consult new car market in Romania with 51,200 units delivered in 2018, up 29%, which brought it a The Skoda Octavia and Renault Clio round out market share of 32.4%. the top five models with around 5,400 units sold each. Volkswagen remained second with 14,600 units, up 4.5%, and share of 9.2%. Skoda took The region has attracted investment from global third place with 13,185 units sold, up 13.4%, giants like Ford in recent years, which bought followed by Renault (14,853 units, up 20.5%), Automobile Craiova for $57 million (£44m) in and Ford (9,500 units, a 17% rise). 2009 to establish a production base in Romania. It started assembling its Ford Transit Connect Petrol accounted for 62% of total automotive at the factory in September 2009 and started sales and electric cars doubled volumes to 682 production of the new B-MAX MPV in 2012. units in 2018. Hybrid sales increased by 60% to 3,585 units. Bosch, the world’s largest supplier of automotive parts, has invested millions of euros The Dacia Logan is the county’s best selling into Romania with new factories and facilities model, with 21,100 units sold in 2018 - an over the last few years. increase of 30.6% year-on-year.
16 17 While Romania is a small automotive market relative to the Big Five, it has Forecast Car Residuals a strong leasing sector that is growing rapidly. Cloudy forecast According to the Operational Leasing Association (ASLO), there has been Rise as Optimism Returns a 32.11% increase in the market between 2014 to 2017 in the number The ‘Big Five’ automotive markets of Europe have all slowed down as the of leased passenger and light commercial vehicles, from 49,200 units to UK’s departure from the EU looms, and Brexit worries along with regulatory pressures, are casting a long shadow, as ExpertEye’s research details 65,000 leased vehicles. Changes in residual value (RV) forecasts, SMR costs and lease rental rates to January 2014 Dr. Adriana Ahciarliu Kyriakidis, founder and general manager at Diplomat Forecast residual values Forecast service, Current rental rates Consult (part of asset finance consultancy Invigors EMEA), said Romania’s EU28 & EFTA3 Monthly Car Sales Trends maintenance and repair costs vehicle leasing sector has been resilient since 2014, after fully recovering As we predicted, the flurry of new car sales in the run up to WLTP for from the global financial crisis in 2008. passenger cars in September was only a precursor to sales then falling 3 month 12 month 3 month 12 month 3 month 12 month Vehicle portfolios show a stable majority of 50% to 60% for the financing for the remainder of the year. By the end of August 2018 year new car change change change change change change of passenger cars, 10 to 15% for the light commercial vehicles and 25% to sales were up 6.8% for the year but by the year end it was virtually flat at France +0.2% +1.7% +0.7% +2.1% +2.0% +1.9% 40% for the heavy commercial vehicles for the same analyzed period. 0.1% above 2017 levels. Of the Big Five European markets Spain saw the strongest performance rising 6.8% in 2018 with France up 3.0% and Germany +0.9% +0.4% +0.8% -2.7% -0.8% -2.5% Dr. Kyriakidis said: “Companies, especially SMEs, are the main category of Germany (-0.2%), Italy (-3.2%) and the UK (-6.8%) all seeing sales falling Italy +1.1% -0.9% -0.1% -8.2% +1.9% +0.6% clients who have accessed finance through leasing. whilst Portugal ended the year up 2.6%. Portugal +0.7% -2.6% +0.2% -2.7% -1.2% -4.9% “Corporate leasing accounts for around 88% of the market, while retail WeEU28 have & E FTA3now seen Monthly seven Car straight Sales Trends months of falling new car sales across Spain -0.1% . +1.0% -1.4% -4.1% -0.9% -1.3% finance takes up 12% and the public sector takes 1%.” the EU28 and EFTA3 countries with Germany the strongest of the Big Five UK +2.8% +7.3% -0.1% +0.4% -0.2% +4.0% EuropeanAs we predicted markets, the flurry with of newa virtually car sales flatin the 0.2%run up togrowth WLTP infor passengerQuarter cars1 (Q1) in September 2019. was only a precursor to sales then falling Francefor the remainder is marginally of the year. down By the 0.6% end offor August the 2018first year three new carmonths sales wereof the up 6.8%year ,for with the year but by the year end it was virtually flat theat 0.1% UK above doing 2017 better levels .than Of the in big 2018 5 European but still markets down Spain 2.4% saw withthe str Italyongest and performance Spain rising 6.8% in 2018 with France up 3.0%It and appears that fleet lessors across Europe are Looking over the past 12 months we can see becoming increasingly optimistic about future that at one extreme forecast RVs rose by 7.3% bothGermany seeing (-0.2%), new Italy car (-3.2%) sales and fallthe UKsharply, (-6.8%) alldown seeing 6.5% sales fallingand 6.9% whilst Portugalrespectively. ended the year up 2.6%. residual values. To end, January we saw in the UK, and at the other extreme they fell by Portugal also saw sales falling for Q1 2019 with sales down 2.1%, with the We have now seen seven straight months of falling new car sales across the EU28 and EFTA3 countries with Germany the strongest of thelessors big increase their forecast RVs by 2.8% in 2.6% in Portugal. total region down 3.6% in March 2019 and 3.2% down YTD compared to the UK, 1.1% in Italy, 0.9% in Germany, 0.7% Forecast SMR costs have also stabilised Q15 European 2018. markets with a virtually flat 0.2% growth in Quarter 1 (‘Q1’) 2019. France is marginally down 0.6% for the first three monthsin ofPortugal and 0.2% in France. Spain reported somewhat over the last three months, having the year, with the UK doing better than in 2018 but still down 2.4% with Italy and Spain both seeing new car sales fall sharply, down 6.5%the and only reduction and this was by just 0.1%). suffered significant falls in Spain, Portugal, Italy 6.9% respectively. Portugal also saw sales falling for Q1 2019 with sales down 2.1%, with the total region down 3.6% in March 2019 and These3.2% figures are collated by Experteye’s and Germany in the previous nine months. European Leasing index survey which tracks down YTD compared to Q1 2018. Rentals seem to have stabilised somewhat too forecasted residual values (RV), servicing, Monthly passenger car registrations in the last three months, having been quite 35.0% maintenance and repair (SMR) costs and rental volatile in the UK, Portugal and Germany in Total EU28+EFTA3 EU28 & EFTA3 Year on Year change 30.0% rates in six European countries using data 2.00 particular in the previous nine months. Millions 25.0% supplied by major leasing companies. 20.0% 15.0% 1.50 10.0% • The comparisons are for vehicles with a contract • RV and SMR changes show the change in 5.0% duration of 36 months / 90,000 KM participating leasing companies' forecasts of residual 0.0% • Twelve month comparisons show change since values and maintenance costs over the period. February 2013 The Experteye European Leasing Index reports on 1.00 (5.0%) • Three month comparisons show change since trends in leasing company forecasts, plus current (10.0%) November 2013. rental rate movements, covering representative (15.0%) • Rental rate changes compare the rates in effect at versions of up to 250 vehicles in the six markets. Total Passenger Car Sales Passenger Total 0.50 (20.0%) the time of the survey with those in effect three or YoY movement in monthly sales
EU28 & EFTA3 (Excl.Malta & Cyprus) (25.0%) twelve months ago. (30.0%) 0.00 (35.0%) Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18 Jan 19 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Nov 14 Nov 15 Nov 16 Nov 17 Nov 18 May 14 May 15 May 16 May 17 May 18
Professor Colin Tourick is a management consultant, former MD of Citibank's fleet leasing Dacia Logan European Automotive Report –2018 & 2019 Q1 ϲ business and a 34 year leasing industry veteran Source: ExpertEye European Automotive Report – 2018 & 2019 Q1 Editor: Professor Colin Tourick Editor in Chief: Brian Rogerson © Asset Finance International, 2013. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of the named individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omis sions or inaccuracies. No copying, whether whole or in part, transmission by any forms or means, electronic or otherwise is permitted.
18 19 EU28 & EFTA3 Annual Car Sales Trends and Forecast the net effect will be a fall in the full year forecast for the whole region of 3.7% for 2019 to around 15.0 million cars and further 2.1% drop in 2020 Legislation and politics continue to have an impact on annual new car sales with all of the major markets seeing varying degrees of falls and only some with WLTP driving down new car sales from September 2018 and the war countries like Poland still seeing growth due to the market dynamics. on diesel pushing sales of new diesel cars down by 18.4% across Europe for the whole of 2018 versus 2017, according to data from the ACEA. In volume terms diesel sales fell by 1.24 million in 2018 over the previous Big Five market share and 0-5 year old used car parc Big five market shareyear andwith 78% 0 of- 5former year diesel oldcar buyers used switching car to petrolparc vehicles Mainly due to the fall in new car sales in the UK in 2018, the big five instead. European markets accounted for 71.8% of the EU28 and EFTA3 region in Mainly due to the fall in newHybrid car cars, sales including in plug-in the UKhybrids in (PHEVs),2018, twerehe thebig other five winners European markets accounted2018, a fall for of 0.5 7 percentage1.8% of thepoints EU28 against andthe 2018 EFTA3 result. region in against falling diesel sales as sales grew by 180,000 which was a 29.6% 2018, a fall of 0.5 percentageincrease points over 2017 against sales. the 2018 result. In percentage terms Battery Electric Cars (BEVs) saw the sharpest rise, dKd> hϮϴΘ &dϯW^^ E' ZZ As anticipated Poland endedup 48.2%, 2018 which with equates another to just over record 65,500 units-breaking across the year.region in New car sales hit ^> ^ϮϬϭϴ total and equivalent to a 1.3% market share. Other alternative fuels, which ZK 'ĞƌŵĂŶLJ 531,889 last year, a rise ofis predominantly9.4% which natural put gas it vehicles just 17,743(NGV), LPG-fuelled units behind vehicles andBelgium. With sales Ϯϲ͘ϴй ϮϮ͘Ϭй ethanol (E85) vehicles, also saw some sales growth, rising 11.8% in 2018 over 2017 to 23,208. Italy remains the main market for these alternative set to drop across most offuels Europe accounting and for 70%Belgium of all sales already in 2018 although 5.9% Spaindown saw by a sharpthe end of Q1 2019 increase taking 20% of these fuel types compared to 2017 where it was just Poland should now overtake2% of Belgiumthe region’s salesto become of these gas Europe’s and alcohol-based sixth fuel larg types.est market this year, WŽƌƚƵŐĂů WLTP is due to hit in September 2019 for light commercial vehicles (LCVs) ϭ͘ϱй one year earlier than we andpreviously also Real Driving anticipated. Emissions (RDE) By forthe cars. end Whilst of some 2019 OEMs we will ex pect Poland to h< ^ƉĂŝŶ have learnt their lesson from WLTP on cars there is no doubt the need to ϭϱ͘Ϯй account for 3.6% of the totalrecertify region’s vehicles undercar sales,RDE for newstill registrations well behind from September fifth placed 2019 Spain but with ϴ͘ϱй willEU2 undoubtedly8 & EFTA3 have Annual another Car negative Sales impact Trends on newand carForecast sales. We think . a much faster growing economy. Legislation and politics continue to have an impact on annual new car sales with WLTP driving down new car sales from Se/ƚĂůLJptember 2018 and &ƌĂŶĐĞ ϭϴ͘ϬϬ the war on diesel pushing sales of new dieselϭϮ͘Ϯй cars down by ϭϯ͘ϵй 'ĞƌŵĂŶLJ h< &ƌĂŶĐĞ /ƚĂůLJ The volume of Euro 5 dieselsϭϲ͘ϬϬ in the car parc 18.4% across Europe for the whole of 2018 versus 2017, DŝůůŝŽŶƐ according to data from theAs ACEA anticipated. Poland ended 2018 with another record-breaking year. New ϭϰ͘ϬϬ ϯ͘ϴϱ ϰ͘Ϭϴ DĂŝŶůĂŶĚ ƵƌŽƉĞ;>,ͿĂŶĚh<Θ/ƌĞůĂŶĚ;Z,Ϳ ϰ͘ϭϬ ϰ͘ϭϳ remains a problem in those countries ϯ͘ϴϴ ϯ͘ϵϴ car sales hit 531,889 last year, a rise of 9.4% which put it just 17,743 units ϯ͘ϵϯ ϯ͘ϭϱ ϯ͘ϵϲ ϯ͘ϵϳ ϰ͘ϬϮ ϯ͘ϲϱ ϯ͘ϵϲ ϬͲϱLJĞĂƌŽůĚƵƐĞĚĐĂƌƉĂƌĐďLJĐŽƵŶƚƌLJŽĨĨŝƌƐƚƌĞŐŝƐƚƌĂƚŝŽŶ ϭϮ͘ϬϬ Ϭ͘ϭϵ Ϭ͘ϮϬ ϯ͘ϰϯ ϯ͘ϱϴ In volume terms diesel salesbehind fell Belgium.by 1.24 million With salesin 2018 set over to drop across most of Europe and Belgium Ϭ͘ϭϲ ϯ͘ϯϯϳϬ͕ϬϬϬ Ϭ͘ϮϮ Ϭ͘Ϯϯ ϭϲ͕ϬϬϬ ϭ͘ϲϯ ϭ͘ϲϭ ϯ͘ϯϬ Ϭ͘Ϯϭ Ϭ͘ϮϮ introducing emission zones in city centresϬ͘Ϯϭ Ϭ͘ϵϱ with ϯ͘ϮϬ ϭ͘Ϯϯ ϭ͘ϯϮ Ϭ͘ϮϮ Ϭ͘Ϯϭ Ϭ͘Ϯϭ Ϭ͘Ϯϭ already 5.9% down by the end of Q1 2019 Poland should now overtake Ϭ͘ϮϮ Ϭ͘ϭϴ ϭ͘ϭϱ ϭ͘ϮϮ ϭϬ͘ϬϬ ϭ͘ϭϲ Ϭ͘ϭϱ Ϭ͘ϭϰ ϭ͘Ϭϯ ϭ͘ϭϱ ϭ͘ϭϯ ϭ͘ϭϱ ϭ͘ϭϳ the previous year with 78% of former diesel car buyers Ϭ͘ϵϴ Ϭ͘ϴϭ Ϭ͘ϭϬ Ϭ͘ϭϭ &ƌĂŶĐĞ 'ĞƌŵĂŶLJ /ƚĂůLJ ^ƉĂŝŶ KƚŚĞƌƐ h< /ƌĞůĂŶĚ Ϯ͘ϭϲ Ϭ͘ϴϲ ϭ͘ϵϳ Belgium to become Europe’s sixth largest market this year, one year earlier Ϯ͘ϯϯ Ϯ͘ϰϵ Ϭ͘ϳϬ Ϭ͘ϳϮ ϭ͘ϴϮ ϭ͘ϵϭ ϭ͘ϳϴ ϭ͘ϲϯ Ϯ͘ϭϲ ϭ͘ϱϳ ϭ͘ϲϴ ϭ͘ϲϯ ϭ͘ϲϬ switching to petrol vehicles instead. ϴ͘ϬϬ ϭ͘ϵϲ ϭ͘ϳϱ ϭ͘ϯϲ than we previously anticipated. By the end of 2019 we expect ϭϰ͕ϬϬϬPoland to dealers struggling to find buyers. As recently asϭ͘ϰϬ ϭ͘ϯϬ ϲϬ͕ϬϬϬ Ϯ͘ϬϬ Ϯ͘ϯϬ ϭ͘ϵϮ Ϯ͘ϬϮ Ϯ͘ϭϭ Ϯ͘ϭϳ Ϯ͘ϭϯ Ϯ͘ϭϰ account for 3.6% of the total region’s car sales, still well behind fifth placed Ϯ͘Ϭϲ ϭ͘ϴϬ Ϯ͘Ϭϴ Ϯ͘Ϭϱ Ϯ͘Ϭϵ February 2019 the German Federationϲ͘ϬϬ Ϯ͘Ϭϱ for Ϯ͘ϮϱMotorϮ͘ϮϬ ϭ͘ϵϬ ϭ͘ϳϵ Hybrid cars, including plugSpain-in buthybrids with (‘PHEVs’),a much faster were growing the economy. ϭ͘ϵϵ Ϯ͘ϲϵ Ϯ͘ϱϰ ϭϮ͕ϬϬϬ dŽƚĂůWĂƐƐĞŶŐĞƌĂƌ^ĂůĞƐ Ϯ͘ϯϰ Ϯ͘ϯϳ Ϯ͘ϰϬ Ϯ͘ϰϴ Ϯ͘ϲϯ Ϯ͘Ϯϵ Ϯ͘Ϯϴ Ϯ͘ϯϯ Ϯ͘ϯϲ Ϯ͘ϰϭ other winners against falling diesel sales as sales grew by ϰ͘ϬϬ Ϯ͘ϭϯ Ϯ͘Ϭϯ ϭ͘ϵϰ Ϯ͘Ϭϰ Ϯ͘Ϯϲ ϱϬ͕ϬϬϬ The volume of Euro 5 diesels in the car parc remains a problem in those Trades and Repairs said there is still around €5 180,000 which was a 29.6%countries increase introducing over 2017 sales. emission zones in city centres with dealers struggling Ϯ͘ϬϬ ϯ͘ϴϭ ϯ͘ϰϳ ϯ͘ϭϱ ϯ͘Ϭϵ Ϯ͘ϵϮ ϯ͘ϭϳ ϯ͘Ϭϴ Ϯ͘ϵϱ ϯ͘Ϭϰ ϯ͘Ϯϭ ϯ͘ϯϱ ϯ͘ϰϰ ϯ͘ϰϰ ϯ͘ϰϬ ϯ͘ϯϰ ϯ͘Ϯϴ ϯ͘ϯϬ ϯ͘ϯϯ to find buyers. As recently as February 2019 the German FederationϭϬ͕ϬϬϬ for billion of these older dieselsϬ͘ϬϬ in dealer stock ϰϬ͕ϬϬϬ In percentage terms BatteryMotor Electric Trades Cars and (‘BEVs’)Repairs sawsaid thethere is still around €5 billion of these older
ϮϬϬϲ ϮϬϬϳ ϮϬϬϴ ϮϬϬϵ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϰ ϮϬϭϱ ϮϬϭϲ ϮϬϭϳ ϮϬϭϴ diesels in dealer stock with many independent dealers facing potential ϮϬϭϵĞ ϮϬϮϬĞ ϮϬϮϭĞ ϮϬϮϮĞ ϮϬϮϯĞ sharpest rise, up 48.2%, which equates to just over 65,500 ϴ͕ϬϬϬ financial ruin. This means we will continue to see an increase in cross- with many independentSource: dealersACEA.BE – Historic datafacing, Bowkett Auto Consulting Ltd - Forecasts ϯϬ͕ϬϬϬ units across the region borderin total selling and equivalent to countries to likea 1.3% the Ukraine, Romania and Hungary which Source: ACEA.BE – Historic data, Bowkett Auto Consulting Ltd – Forecasts potential financial ruin. marketThis share.means Other wealternative will fuels, which is predominantly natural gas vehicles (NGV), LPG-fuelled arevehicles seeing and record ethanol breaking (E85) vehicles levels ,of imports from countries likeϲ͕ϬϬϬ Germany. >,ǀĞŚŝĐůĞƐŝŶΖϬϬϬƐ also saw some sales growth, rising 11.8% in 2018 over 2017 to 23,208. Italy remains the main market for these alternative fuels accounting for Z,ǀĞŚŝĐůĞƐŝŶΖϬϬϬƐ ϮϬ͕ϬϬϬ continue to see an increase70% of allin sales cross in 2018-border although Spain saw a sharp increase taking 20% of these fuel types compared to 2017 where it was just 2% of the ϰ͕ϬϬϬ region’s sales of these gas and alcohol-based fuel types. selling to20 countries like the Ukraine, Romania ϭϬ͕ϬϬϬ Ϯ͕ϬϬϬ 21 WLTP is due to hit in September 2019 for light commercial vehicles (‘LCVs’) and also Real Driving Emissions (‘RDE’) for cars. Whilst some OEMs and Hungary which are seeingwill have record learnt their breaking lesson from WLTP on cars there is no doubt the need to recertify vehicles under RDE for new registrations from September Ϭ Ϭ levels of imports from countries2019 will undoubtedlylike Germany. have another negative impactϮϬϬϳ on newϮϬϬϴ carϮϬϬϵ sales. ϮϬϭϬWe thinkϮϬϭϭ the netϮϬϭϮ effectϮϬϭϯ will ϮϬϭϰbe a fallϮϬϭϱ in theϮϬϭϲ full yearϮϬϭϳ foreϮϬϭϴcast forϮϬϭϵĞ the ϮϬϮϬĞ ϮϬϮϭĞ ϮϬϮϮĞ ϮϬϮϯĞ whole region of 3.7% for 2019 to around 15.0 million cars and further 2.1% drop in 2020 with all of the major markets seeing varying degrees of falls and only some countries like Poland still seeing growth due to the market dynamics. Source: ACEA.BE – Historic data, Bowkett Auto Consulting Ltd - Forecasts
European Automotive Report –2018 & 2019 Q1 ϳ
European Automotive Report –2018 & 2019 Q1 ϴ
Big five market share and 0-5 year old used car parc Mainly due to the fall in new car sales in the UK in 2018, the big five European markets accounted for 71.8% of the EU28 and EFTA3 region in 2018, a fall of 0.5 percentage points against the 2018 result. dKd> hϮϴΘ &dϯW^^ E' ZZ As anticipated Poland ended 2018 with another record-breaking year. New car sales hit ^> ^ϮϬϭϴ ZK 'ĞƌŵĂŶLJ 531,889 last year, a rise of 9.4% which put it just 17,743 units behind Belgium. With sales Ϯϲ͘ϴй ϮϮ͘Ϭй set to drop across most of Europe and Belgium already 5.9% down by the end of Q1 2019
Poland should now overtake Belgium to become Europe’s sixth largest market this year, WŽƌƚƵŐĂů ϭ͘ϱй one year earlier than we previously anticipated. By the end of 2019 we expect Poland to h< ^ƉĂŝŶ ϭϱ͘Ϯй account for 3.6% of the total region’s car sales, still well behind fifth placed Spain but with ϴ͘ϱй a much faster growing economy. /ƚĂůLJ &ƌĂŶĐĞ ϭϮ͘Ϯй ϭϯ͘ϵй The volume of Euro 5 diesels in the car parc Whilst Poland should overtake Belgium this year to become Europe’s remains a problem in those countries DĂŝŶůĂŶĚ ƵƌŽƉĞ;>,ͿĂŶĚh<Θ/ƌĞůĂŶĚ;Z,Ϳ sixth largest market, its 2018 per capita rate was less than half the EU ϬͲϱLJĞĂƌŽůĚƵƐĞĚĐĂƌƉĂƌĐďLJĐŽƵŶƚƌLJŽĨĨŝƌƐƚƌĞŐŝƐƚƌĂƚŝŽŶ average of 29.7 cars that year and well short of the Big Five markets. With introducing emission zones in city centres with ϳϬ͕ϬϬϬ ϭϲ͕ϬϬϬ &ƌĂŶĐĞ 'ĞƌŵĂŶLJ /ƚĂůLJ ^ƉĂŝŶ KƚŚĞƌƐ h< /ƌĞůĂŶĚ a population of around 38 million people Poland would equal Spain in total new car sales if it gets to the Big Five market average. It should be noted dealers struggling to find buyers. As recently as ϲϬ͕ϬϬϬ ϭϰ͕ϬϬϬ that new cars sales per capita in Belgium are significantly above most of February 2019 the German Federation for Motor ϭϮ͕ϬϬϬ Europe, this is due to the distortion caused by the volume of fleet cars sold ϱϬ͕ϬϬϬ in the market which later get exported as used vehicles. Trades and Repairs said there is still around €5 ϭϬ͕ϬϬϬ billion of these older diesels in dealer stock ϰϬ͕ϬϬϬ Passenger car sales per capita . ϴ͕ϬϬϬ with many independent dealers facing New passenger car sales per thousand population ϯϬ͕ϬϬϬ With new car sales falling and unlikely to rise sharply across much of 55.0 55.0 potential financial ruin. This means we will ϲ͕ϬϬϬ >,ǀĞŚŝĐůĞƐŝŶΖϬϬϬƐ the European Union in the short-term new carZ,ǀĞŚŝĐůĞƐŝŶΖϬϬϬƐ sales per thousand 50.0 50.0 ϮϬ͕ϬϬϬ continue to see an increase in cross-border head of population are set to flatten outϰ͕ϬϬϬ over the next few years. 45.0 45.0 selling to countries like the Ukraine, Romania ϭϬ͕ϬϬϬ Poland (14.0/’000), Slovakia (18.0/’000),Ϯ͕ϬϬϬ Croatia (14.6/’000) and 40.0 40.0 and Hungary which are seeing record breaking Ϭ Lithuania (11.5/’000) all saw record breakingϬ sales rates per capita 35.0 35.0 levels of imports from countries like Germany. ϮϬϬϳ ϮϬϬϴ ϮϬϬϵ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϰ ϮϬϭϱ ϮϬϭϲin 2018,ϮϬϭϳ whilstϮϬϭϴ ϮϬϭϵĞ DenmarkϮϬϮϬĞ ϮϬϮϭĞ at 37.7ϮϬϮϮĞ carsϮϬϮϯĞ per capita just missed beating 30.0 30.0 the 38.4 cars per capita record set in 2017. Source: ACEA.BE – Historic data, Bowkett Auto ConsultingSource: ACEA.BE Ltd – Forecasts – Historic data, Bowkett Auto Consulting Ltd - Forecasts 25.0 25.0
The big 5 European car markets by size are Germany, the UK, France, 20.0 20.0 European Automotive Report –2018 & 2019 Q1 Italy and Spain and combined they saw salesϴ hit 34.6 in 2018 only Passenger car sales per capita 15.0 15.0 slightly behind the average of 35.2 from 1990 to date and the 34.8 With new car sales falling and unlikely to rise sharply across much of the 10.0 10.0 European Union in the short-termaverage new since car sales the start per thousand of this century. head of After overheating between population are set to flatten out over the next few years. 5.0 5.0 2014 and 2017 where sales peaked at 41.1 units per capita, the UK Poland (14.0/’000), Slovakia (18.0/’000), Croatia (14.6/’000) and Lithuania 0.0 0.0 (11.5/’000) all saw record breakinghas returned sales rates to permore capita normalised in 2018, whilstlevels along with France and 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f 2023f Denmark at 37.7 cars per capitaGermany, just missed whilst beating Spain and the Italy38.4 carsstill haveper room for further growth. Total EU28+EFTA* Belgium France capita record set in 2017. Germany Italy Poland Portugal Spain UK This means new car sales overall are tracking pretty much in line The Big Five European car markets by size are Germany, the UK, France, *Reference to EU28 & EFTA based on EU membership as at the dates indicated Italy and Spain and combinedwith they market saw sales norms hit 34.6despite in 2018 the onlyhiatus slightly caused by events like WLTP Source: ACEA.BE, World Bank: Population Total, Bowkett Auto Consulting Ltd behind the average of 35.2 from 1990 to date and the 34.8 average causing local market discrepancies. It also means any attempt by manufacturers to significantly increase sales in the three largest markets is since the start of this century. After overheating between 2014 and 2017 Source: ACEA.BE, World Bank: Population Total, Bowkett Auto Consulting Ltd where sales peaked at 41.1 unitslikely per to capita,come at the quite UK hasa cost. returned to more normalised levels along with France and Germany, whilst Spain and Italy still have room for further growth.Whilst Poland should overtake Belgium this year to become Europe’s sixth largest market, its 2018 per capita rate was less than half the EU This means new car sales overallaverage are of tracking 29.7 cars pretty that much year in and line well with short of the big 5 markets. With a population of around 38 million people Poland would equal Spain in For a full copy of the latest ExpertEye European Automotive Industry market norms despite the hiatus caused by events like WLTP causing total new car sales if it gets to the Big 5 market average. It should beReport noted andthat more new carsdetails sales of theper reseach, capita in go Belgium to http://experteye.com are significantly .above local market discrepancies. It also means any attempt by manufacturers to significantly increase sales inmost the threeof Europe largest, this markets is due isto likely the distortionto come atcaused by the volume of Datafleet andcars analysis sold in the for themarket ExpertEye which laterreport get is compiledexported byas Deanused vehiclesBowkett,. quite a cost. managing director, Bowkett Auto Consulting.
European Automotive Report –2018 & 2019 Q1 ϭϬ
22 23 Editor: Pat Sweet Editor in Chief: Brian Rogerson
© Asset Finance International, 2019. All rights reserved. The contents of this publication may be downloaded from Asset Finance International and are intended only for the individual use of the named individual who has registered to receive it. Contents are for informational purposes only. No liability will be accepted for any omissions or inaccuracies. No copying or transmission, whether whole or in part, in any form or by any means, electronic or otherwise, is permitted.