11 February 2020
Robert Madas, Valuations and Insights Manager for Austria and Switzerland at Autovista Group’s Eurotax looks at the trends in the Austrian car market.
With 329,363 new-car registrations, the Austrian market for new cars in 2019 was 3.4%, or 11,705 units, weaker than 2018. The determining trends in Austria continued to be declining diesel registrations and significant growth in hybrid and electric vehicles, albeit from a low level. Diesels gained only a 38.4% market share and the decline was not just among private customers. For the first time, significantly more petrol engines were registered by fleets than diesel engines. The share of all alternative-fuel vehicles (AFVs) was still relatively low at 8.0%, or 26,346 new registrations, but the 56.8% growth rate was very strong. What do these signs mean for the new year?
In 2020, Autovista Group anticipates a stagnating or slightly increasing level of around 330,000 to 335,000 new-car registrations. Over the year, the impending CO2 fines will show their effects. We expect a large number of tactical registrations of cars with low CO2 towards the end of the year. The amount of tactical registrations will depend on the level of demand for alternative powertrains during the year.
Manufacturers must register as many low-emission vehicles as possible this year to avoid fines. Electric and hybrid vehicles will definitely be pushed this year but the actual demand is difficult to estimate. In addition to many new electric models, traditionally high-volume models such as the eighth generation of the Golf and the new Skoda Octavia will also reach the market.
We generally expect a further increase in AFVs but long delivery times for some newly-introduced models could be problematic and could cause greater reluctance among consumers. It can be assumed that the market cannot easily accommodate all low-emission vehicles. This could result in manufacturers offering large discounts or registering cars tactically. In particular, discounts will have a negative impact on residual values in the coming years as list-price reductions can hardly be recovered later on the used market.
Diesel dominating used cars
Trends in the new-car market are becoming visible on the used market, albeit with a lag effect. So far, diesel has remained at a very high level with just over a 60% share of all used-car registrations. We expect a gradual decline in the coming year as diesel cars have been under strong pressure in new-car registrations since 2017. The trend towards SUVs in the new-car market will also become increasingly apparent in used-car registrations in 2020. New-car registrations were strong in December but the month was also used to register models with high-fuel consumption and emissions. Some of these vehicles will come onto the market in 2020 as young used cars.
In 2020, we are expecting around 870,000 used-car registrations and therefore a stable market. After the very strong new-car demand in 2017, numerous three-year-old vehicles are coming onto the used market this year, which will make it more dynamic on the supply side. As fleet registrations were still mostly diesel in 2017, we continue to expect a large supply of diesel cars in this age group.
However, market observations reveal an increase in the average number of stock days since the end of 2018 - both for petrol and diesel cars. If this additional supply meets stagnant demand, it is to be expected that prices will tend to fall in this age group.
With regard to AFVs, an above-average increase in used-car registrations is also to be expected. As with new registrations, the growth trend will continue but with a lag effect.
This article can be found in German on the Eurotax Austria website here.