New-car registrations improve across Europe in May as dealers reopen

03 June 2020

3 June 2020

The automotive trade associations in France and Italy report that new-car registrations halved in May compared to last year, while Spain saw a decline of 73%. However, the volumes are improving as dealerships reopened in the three markets during the month. Autovista Group senior data journalist Neil King discusses the latest developments.

With showrooms and registration centres still closed in many countries, Autovista Group expected that registration figures would bottom out across European markets in April before recovering in May. This has certainly materialised in France, Spain and Italy.

New-car registrations were 49.6% lower in Italy in May 2020 than in May 2019, according to the latest data released by ANFIA, the Italian automotive industry association. This contraction was replicated in France, where registrations fell by 50.3% according to data published by the CCFA.

In Spain, 34,337 new cars were registered in May, 72.7% fewer than in May 2019 according to ANFAC, the Spanish vehicle manufacturers’ association. ANFAC reports that this is ‘the second-worst number of registrations in the historical series. To find such a low figure, you have to go back to September 2012, when 35,148 passenger cars were sold in a month. However, the progressive opening of dealerships since 11 May has made it possible for May to improve on the figures for April, when only 4,163 units were sold.’

New-car registrations in France, Italy and Spain, year-on-year percentage change, May and year-to-date 2020

Graph

Source: CCFA, ANFIA, ANFAC

Phased reopening in Spain

Dealerships reopened on 4 May in Italy. ‘Clearly they have to stick to the Government rules in respect of social distancing but finally they are at work,’ commented Stefano Ferruzzi, country manager of Autovista Group in Italy. This is a week earlier than in France and Spain, where dealers reopened on 11 May.

However, there has been a phased approach to relaxing the lockdown measures in Spain, which largely explains why the new-car market did not perform as well as in France and Italy. These phases are also not applied nationally or regionally but at a county and island level.

During the first phase (phase 0), dealers could reopen if they are smaller than 400 square metres and have already implemented new health and safety protocols.

‘The main barrier is that you are only allowed to go to a dealer if the dealer is less than one kilometre from your home and you cannot travel there by car or public transport,’ commented Ana Azofra, valuations and insights manager of Autovista Group in Spain

In the next phase (phase 1), all dealers could reopen as long as they adhere to the health and safety protocols. Phase 1 started in most counties on 11 May, but not all. ‘Many areas remained on phase 0. This was the case in Madrid and Barcelona, where many dealers are concentrated. Last week, these areas moved to phase 1 and have less restrictions. In phase 2, dealers can open and operate in the ‘new normal’ way,’ Azofra added.

Raúl Morales, communications director of Faconauto, commented that ‘all the departments of the dealerships have seen their activity drop sharply, particularly that of new vehicles, which is operating at 30% of its capacity.’

Regaining dynamism

Noemi Navas, ANFAC communications director, added that ‘it is private buyers and companies that are driving the car market because the rental channel is still paralysed in the absence of tourism. It may be that in June this channel will start to rise, but it is clear that the sector as a whole needs stimuli as soon as possible to regain the dynamism before the crisis. As much as we strive for dealerships and brands to put powerful promotional efforts and initiatives on the table, something else is needed. This plan to reactivate demand, already announced, but not materialised with the sector, which may also be stopping the market, cannot wait any longer. That plan is necessary, it will have immediate positive effects and it will change a dynamic that is testing our survival.’

Azofra emphasised that unemployment in Spain has now reached the highest level since 2016 and that private consumption is heavily affected. ‘Some incentives are coming but they have not been specified yet and so potential buyers could postpone their purchase decision.’

According to Ganvam's director of communications, Tania Puche, ‘families that have some money save as a precaution and rent-a-car companies, with a direct relationship to tourism, do not dare to renew their fleets either because the uncertainty about movement between borders has the summer season in suspense. This situation highlights the urgency of launching stimulus measures for the sector. The automotive sector is transversal and if there is no support, it will cause a domino effect on the economy that is difficult to recover.’

Calls were already mounting for a series of scrappage schemes across Europe once the coronavirus pandemic has receded enough to allow vehicle sales to resume. In the context of the situation in Spain for example, the pressure on governments will inevitably increase, with carmakers in the UK joining associations across Europe in asking for help to improve post-coronavirus sales.