Unprecedented fall in new-car registrations across Europe in March

02 April 2020

2 April 2020

In the first wave of European new-car registrations data published for March, the respective automotive trade associations in France, Spain and Italy report that registrations have fallen by more than two-thirds compared to March 2019. Autovista Group senior data journalist Neil King discusses the latest developments.

Early in March, Autovista Group expected that the Italian market would suffer the most, at least in the short term, because of the high number of reported cases of the coronavirus (COVID-19) and the extension of emergency measures to cover the whole country. This assumption has materialised, with new-car registrations 85.4% lower in March 2020 than in March 2019. The situation is not dissimilar in France and Spain, with registrations falling by 72% and 69% respectively.

New-car registrations in France, Italy and Spain, year-on-year percentage change, March and Q1 2020

EU sales drop March 2020

Source: CCFA, ANFIA, ANFAC

To put this into perspective, I recall, at the time of the financial crisis, being shocked at monthly downturns of over 20% in the Baltic States. That pales into insignificance compared to these first figures for March.

Worse before it gets better

With dealers (except for servicing in some cases) and even registration centres closed, the registration figures across European markets are expected to be worse in April but this hinges on how long the pandemic lockdown measures are in effect.

Dealers officially closed in Italy on 12 March, although some were already closed beforehand. ‘Not only the dealerships but also the public offices in charge of registering the new cars are closed and this has been extended by Government Decree until 14 April – and most likely will be in force for the whole of April. Therefore we only expect a few thousand units to be registered in April as well’ commented Stefano Ferruzzi, country manager of Autovista Group in Italy.

Sales activities stopped in France and Spain too after their respective governments closed all non-essential businesses on 14 March.

The lockdown is in effect until 11 April in Spain but Ana Azofra, valuations and insights manager at Autovista Group there, comments; ‘Although it has not been reported yet, we are expecting an extension of the lockdown and a gradual return to activity. I do not know for how long dealers will be closed.’

‘By March 15, the French market had already declined by 33% and all channels were already impacted but registrations fell 95% from 16 March. Right now, dealerships remain closed until at least 14 April and for 2020 as a whole, we expect a 20% contraction of the new-car market,’ commented Yoann Taitz, operations director of Autovista Group in France.

March 2020 new-car registration figures have not yet been released for Germany and the UK but the downturns are expected to be less dramatic. This is because measures to slow the coronavirus pandemic were introduced later. The decision to close the retail part of dealerships has been in effect nationwide in Germany since 18 March and could operate as usual in the UK until Prime Minister Boris Johnson’s address to the nation on 23 March.

Scenario analysis

The outlook for new-car markets depends on how quickly COVID-19 can be contained and dealerships and registration centres can return to a semblance of normality. To assist with analysing the impact of the coronavirus on the automotive industry, Autovista Group has developed a number of scenarios.

Italy and Spain assign the highest probability to a low-medium risk scenario, which we call a “moderately-quick V-shaped recovery”. Within this, we expect a sharp downturn of the economy during the second quarter, a V-shaped recovery towards the end of Q3 2020 and particularly good performance during Q4 2020, with some potential to compensate for the losses accumulated.

France is already more pessimistic in its assessment of the situation, but other European countries are also assigning substantial probability to the more pessimistic “slow, U-shaped recovery” scenario. In this scenario, we still expect a full recovery of economic activity during 2020 but the pandemic will cause longer social and economic disruption. The economy will only gradually pick up speed and economic activity will only be restored towards the end of the year. Under these circumstances, a recovery would more likely be U-shaped.

A key consideration is how manufacturers can restart vehicle production. Aside from the risk of creating a second wave of COVID-19 cases, there are concerns that some automotive suppliers will not survive the fallout from the coronavirus pandemic. German newspaper Handelsblatt reports that the heads of BMW, Daimler and Volkswagen discussed this on a call yesterday evening (1 April) with chancellor Angela Merkel and leading representatives of the German Government.