U.K. is bright spot in weak European market

Automotive Industries,  Feb, 2003  by Anthony Lewis

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The Western European market ended 2002 with passenger car sales of 14,390,l63 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.

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.

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.

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 to 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 in its first full year of sales (105,366 units).

Losers were many -- biggest was the Fial 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 hose with new products (Peugeot with 307, Citroen with 03, BMW and Mini, Ford with new Fiesta) to know that nothing beats good product when it comes to winning the sales war. *

EUROPEAN NEW CAR MERKET

                December  December  % Chg    Jan-Dec     Jan-Dec
                2002      2001      '02/'01  2002        2001

Austria         12,833    11,655    +10.1    278,908     293,528
Belgium         18,151    21,205    -14.4    467,569     488,683
Denmark         8,351     7,882     +6.0     110,887     96,187
Finland         4,905     5,137     -4.5     117,037     109,428
France          159,458   160,247   -0.5     2,145,073   2,254,732
Germany         229,000   226,174   +1.2     3,253,402   3,341,718
Greece          12,653    12,478    +1.4     268,489     280,214
Ireland         1,645     891       +84.6    156,115     164,730
Italy           198,600   131,167   +51.4    2,270,900   2,413,455
Luxembourg      1,892     2,021     -6.4     43,413      42,833
Netherlands     20,410    8,677     +135.2   510,744     530,231
Portugal        13,167    17,709    -25.6    226,129     255,215
SpaIn           114,506   107,007   +7.0     1,331,878   1,425,573
Sweden          20,987    21,673    -3.2     254,589     246,581
United Kingdom  144,576   126,471   +14.3    2,563,631   2,458,769
European Union  961,134   860,394   +11.7    13,998,764  14,401,877
Iceland         348       272       +27.9    6,943       7,245
Norway          5,322     5,822     -8.6     88,721      91,916
Switzerland     21,588    19,953    +8.2     295,735     316,641
EFTA            27,258    26,047    +4.6     391,399     415,802
Western Europe  988,392   886,441   +11.5    14,390,163  14,817,679

                % Chg
                '02/'01

Austria         -5.0
Belgium         -4.3
Denmark         +15.3
Flnland         +7.0
France          -4.9
Germany         -2.6
Greece          -4.2
Ireland         -5.2
Italy           -5.9
Luxembourg      +1.4
Netherlands     -3.7
Portugal        -11.4
SpaIn           -6.6
Sweden          +3.2
United Kingdom  +4.3
European Union  -2.8
Iceland         -4.2
Norway          -3.5
Switzerland     -6.6
EFTA            -5.9
Western Europe  -2.9

Source: ACEA