The Italian and Spanish passenger car markets have both recorded gains in 2014, with the former recording its first improvement since 2009. However, both countries still have a great deal of gains to make going forward.
IHS Automotive perspective | |
Significance | The Italian passenger car market has recorded an improvement of 4.2% y/y during 2014, while the incentive-led Spanish market has finished with a gain of 18.4% y/y. |
Implications | Despite rising during the year, these markets remain considerably behind where they once were. |
Outlook | For 2015, IHS Automotive expects that the Italian passenger car market will rise 4.5% y/y while Spanish sales will be up by 5.8% y/y, with further gains to be recorded in the years to come. |
Italy
The Italian passenger car market has ended 2014 with a gain of 4.2% from 2013. According to the latest data released by trade association ANFIA, registrations during the year have increased from 1,304,648 units to 1,359,616 units. This was helped by an improvement during December of 2.4% y/y to 66,163 units. Registrations of Fiat Group Automobiles (FGA) vehicles – comprising the Fiat, Alfa Romeo, Lancia/Chrysler and Jeep brands – during the year improved more marginally though, growing 0.8% y/y to 376,721 units, representing a dip in market share to 27.7%. The rate of improvement was heavily influenced by the Fiat brand, which rose 0.8% y/y to 281,582 units. However, it was left to the launches made by the Jeep brand to offset the declines recorded by Alfa Romeo and Lancia/Chrysler. Following Fiat in the brand chart this year has been Volkswagen (VW) which was up 4.6% y/y to 110,227 units, while Ford came in third after making 91,541 registrations, an improvement of 4.7% y/y. However, it was Renault's Clio which was the best selling non-FGA model in 2014, behind Fiat's Panda, Punto and 500L, as well as Lancia's Ypsilon.
Spain
The Spanish passenger car market has benefited from double-digit percentage gains in 2014 mainly on the back of the Industrial Plan for the Ecological Vehicle (Plan Industrial del Vehículo Ecológico: PIVE) scrapping incentive. According to data published by Spanish trade association ANFAC, registrations during the year have grown by 18.4% y/y to 855,308 units. This was bolstered by a 21.4% y/y gain in the final month of the year to 73,440 units after an extension was granted by the Spanish government to the sixth round which had been exhausted at the end of October to address a shortfall up until 31 December. The biggest selling brand this year was Volkswagen (VW) which sold 76,958 units during 2014, an increase of 20.4% y/y, thanks to the popularity of the Golf and the Polo which were both top-10 selling models. Local brand SEAT held on to second place with sales of 67,894 units, an increase of 14.9% y/y, as it managed to hold off Opel and Renault with a 42.6% y/y gain in the final month of the year to 6,167 units. Nevertheless, Renault's Mégane was the top selling model this year thanks to incentives.
Outlook and implications
As was expected, the Italian passenger car market has recorded its first gains for a number of years, with the second half of the year starting to show signs of some stability after improving for seven months in succession. Nevertheless, the Italian market remains exceptionally fragile. Indeed, Italy entered a new technical recession in the third quarter of 2014, confirming that the economy will contract for a third successive year in 2014. It has also not helped by the weak labour market or consumer spending which remains under pressure, and as a result households maintain a quite cautious mood and replace their ageing cars if strictly necessary, according to IHS Automotive's Pierluigi Bellini. This is underlined by an increase in private demand of only 2.3% y/y. However, there has been a 14% y/y in registrations of rental cars and 3.4% y/y increase in company cars. There is some accumulating support to kick-start the economy from early 2015, namely the sharp fall in global crude oil prices, the slide in the euro, and a proposed round of income and business tax cuts from 2015. IHS Automotive currently expects that the passenger car market will gain by around 4.5% y/y during 2015 and an even larger gain in 2016 which will then continue until the end of the decade. Even so, the number of registrations made will be considerably below the previous decade, with little sign that they will be close to being returning to these highs in our current forecast visibility.
The Spanish passenger car market has benefited from the incentives that have been made available to bring private customers into the market over the past couple of years, and 2014 results have reflected this, as well as being underlined by 16 months of consecutive gains. As noted, private buyers have been the main beneficiary of this scheme and sales have increased by 21.3% y/y to 483,767 units in 2014. However, demand to other types of customers has also been lifted, with a 13.8% y/y increase in the number of company cars sold to 216,233 units while the number of vehicles registered by rental car fleets has increased by 16.1% y/y to 155,308 units. Looking forward, IHS Automotive has lifted its expectations for 2015, expecting demand to grow by 5.8% y/y. The reason for this decision has been due to the extension of the Plan PIVE scheme in to a seventh round as part of the 2015 budget: funding is expected to last until April. We also anticipate some benefit from the lower fuel price on consumer spending, higher levels of manufacturing and a lack of incentive to save due to low interest rates. We also expect gains to continue until at least the end of the decade, with the 1 million unit mark breached in 2018. Nevertheless, sales remain below the peaks seen during the past decade and seem unlikely to reach those levels again, as the market finds a naturally lower level.