Small cars and eco fuels lead July sales recovery

JATO Dynamics, the world’s leading provider of automotive data and intelligence, has released its monthly European new car market analysis for July 2009, showing the Volkswagen Golf remains untouchable as Europe’s best-selling car, despite strong sales performances in a resurgent small-car segment.

Golf’s fifth consecutive month at the top of the charts is yet another where it outperformed its own previous year sales, being up 15.5% year-to-date (YtD) and 26.9% in July, although the gap to its rivals is smaller than 2008.

Ford’s new Fiesta has continued to increase its sales across Europe, up 37.1% YtD and a massive 55.9% for the month of July. Boosted by its popularity with German, Italian and British scrappage-incentivised customers, it also becomes the only non-French brand in the YtD Top 10 in France.

Other small car rivals are following its lead, headed by Fiat – Panda posted sales rises of 32.6% YtD and 47% in July, while Punto buoyed the Italian carmaker with sales up 2.5% YtD and 38% for the month.

Small cars are continuing to lead the recovery and are the main reason behind a 3.3% rise in the European new car market in July, while the YtD deficit in new car sales has improved, to be only 8.5% behind 2008. In a marked contrast to previous years, the top ten best-selling cars are now all B- or C-segment vehicles.

Other Government-backed incentives are also influencing the market, with sales of LPG and CNG-fuelled cars more than double the figure for the same period last year. Italy leads the way for these ECO fuels, followed by France for LPG, Sweden and Germany for CNG. Meanwhile, reduced demand for larger cars has led to diesel’s share of the European new car market falling below 50% for the first time since May 2007.

“The much talked about ‘green shoots’ of recovery can be seen in the small car segment, which is the greatest beneficiary of scrappage incentives and European customers’ desire to move to more affordable cars. Whether this performance is sustainable remains to be seen,” says David Di Girolamo, Head of JATO Consult.

Brand Performance

Volkswagen remains Europe’s top-selling car brand, posting a modest 0.9% increase in overall brand sales, versus 2008. Ford maintains a close second, with Opel/Vauxhall third for the month of July. Fiat’s continuing strong brand performance and its willingness to embrace incentives has brought it up to fourth overall YtD.

National Trends

Behind the downward European sales trend, the picture of national new car sales shows the varying effect of scrappage schemes around Europe. Of the big 5 European markets only Germany and France have made their way into the black, the former by 26.6% YtD. Encouraging signs of recovery can be seen in Austria, Italy, Great Britain, Poland and Slovakia when considering July registration increases over the same period last year, but this will need to be sustained in these markets to bring them back on track.