U.K. is Bright Spot in Weak European Market
The Western European market ended 2002 with passenger car sales of 14,390,163 units — down 2.9 percent over 2001. In the 15 countries of the European Union, the market fell to 13,998,764. This was the steepest decline since 1995 and the first time new car sales in the EU have dropped below 14 million units since 1997, according to the latest figures from ACEA, the European car makers’ association.
Even so, this was better than some observers had predicted and there were some bright spots.
Five of the 18 countries (the 15 of the European Union plus Iceland, Norway and Switzerland) recorded increases ranging from 15.3 percent in Denmark (a small market of just 110,887 units in 2002) to Luxembourg, up 1.4 percent at 43,413.
Of the major markets — Germany, the U.K., France, Italy and Spain — only the U.K. recorded an increase with its second successive year of record sales at 2,563,631.
The German new car market saw a drop of 2.6 percent to 3,253,402 units in 2002. Italy was down 5.9 percent to 2,270,900 units, France fell 4.9 percent to 2,145,073 and Spain dropped 6.6 percent to 1,331,878 units.
The biggest fall was in Portugal, another relatively small market, which saw sales slump by 11.4 percent to 226,129.
Predictions for 2003 are that the overall European market will again soften, perhaps falling by another two percent, even in the buoyant U.K. market. Buyers in Britain have responded well to continuously falling prices over the last couple of years as car makers have been forced to cut prices following publicity over the U.K. being a “Treasure Island” for manufacturers and importers. This was based on a number of surveys which claimed to show that British motorists were paying more for their cars than any other country in Europe.
The New Year has already kicked off with a host of zero percent finance deals across the main markets.
The Volkswagen Group is still Europe’s No. 1, despite year-on-year sales slipping by more than five percent. Renault is the biggest single brand with sales of 1.54 million, ahead of VW at 1.49 million. The PSA Group (Peugeot and Citroen) increased both its market share from 14.4 percent to 15.5 percent) and its total sales volume, up 1.1 percent to 2.16 million. Ford’s share increased from 8.6 percent 8.7 percent while arch-rival GM saw a fall from 10.8 percent to 10 percent. Earl Hesterberg, vice president, marketing, sales service for Ford of Europe, said: “We’re proud that Ford is one of the few manufacturers to have increased its market share in 2002 despite a very soft European car market and heavy competitive incentive spending. Our good sales results in 2002 show that Ford’s European transformation is working not only in the area of profit, but also in market share.”
Other big winners include Toyota, Mazda and Honda and the BMW Group, up 13.8 percent thanks to the huge success of the Mini its first full year of sales (105,366 units).
Losers were many — biggest was the Fiat Group which was hardly a surprise. Once consistently among Europe’s top three, Fiat is now outside the top five. Sales were down 16.8 percent and market share slipped from 9.6 percent to 8.2 percent.
At the bottom of the list is MG Rover, outsold by nearly all the Japanese except troubled Mitsubishi. No coincidence that both are in desperate need of new product. You only have to look at the success of those with new products (Peugeot with 307, Citroen with C3, BMW and Mini, Ford with new Fiesta) to know that nothing beats good product when it comes to winning the sales war. This article was provided exclusively to Automotive Industries by Interchange, a U.K.-based automotive business agency and consultancy servicing media and corporate clients. Anthony Lewis is a partner in Interchange and can be contacted via e-mail at firstname.lastname@example.org