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German and UK new car markets move in different directions

The continued weakness of the German market in March combined with sluggish demand in other major markets such as France and Belgium more than outweighed the remarkable gains in the UK and Italy and a net volume contribution from new EU member states, reports Global Insight, but its forecast for European sales remains at 15.87 million units for the full year 2007.

Growth is expected to come from relatively small markets such as Romania, Poland, Ireland and Norway. Western Europe's largest markets will continue to generate the bulk of the region's volume but sales will remain stagnant at best. Growth will be far from broad-based, with Italy enjoying incentivesed growth, France experiencing a mild comeback, and Germany enduring a year of VAT payback. Meanwhile, says Global Insight, the UK will continue to ‘stagger along below trend’ and Spain will face a couple of years of below-par demand.

Toyota continues to outperform most established brands in Europe, with March sales advancing no less than 6.2% y/y at 110,110 units, meaning that Toyota’s Q1 sales were up 12.9% y/y to 262,817 units and therefore booked the largest volume gains in absolute terms (+30,079 units). Toyota's growth is supported by strong demand for new versions of the Yaris, Aygo and RAV4 SUV. Similarly at Fiat Group, the arrival of a number of compact and small models such as the New Panda, Grande Punto and Bravo, and recovery of the Lancia and Alfa Romeo brands clearly helped bolster Alfa’s position across Europe.

With sales rising another 6.3% in March, the Fiat has almost caught up with the Renault Group in the Q1. Fiat Group sold a total 350,900 units in the Q1 in the whole region compared to 350,998 units for the Renault Group. In fact, in Western Europe (EU15 + EFTA) Fiat edged past Renault, selling 131,746 units in March (against 129,975 units for the Renault Group) and was well ahead in the Q1. March was another ‘disastrous’ month for Renault, which suffered a 9.4% decline. Nissan was the other big loser in March with sales shrinking 16.6% y/y to 32,779 units, thus allowing Honda, Hyundai and Suzuki to move ahead. The Volkswagen Group remained Europe’s market leader despite weak sales at the core VW brand. Ford reported a 2.4% sales rise in the first quarter whereas cumulative sales at General Motors are beginning to show some clear signs of exhaustion after a 1.6% fall in March. (