Article Type: Insights

Podcast: How does electric impact residual values and used-car strategies?

The Autovista Group Daily Brief team takes a look at some of the biggest automotive trends of the past fortnight. Phil Curry, Neil King and Tom Geggus discuss electrically-chargeable vehicle residual values, electromobility strategies and modular electric platforms.

Show notes

Surging demand for new BEVs mounts pressure on residual values

France invests €100 million in EV-charging infrastructure

Call for one million public EV chargers in the EU by 2024

Ford to be zero-emission capable in Europe by 2026

Jaguar makes BEV and hydrogen changes on path to net zero

REE maps out UK engineering centre

Shell to transform into net-zero energy provider by 2050

Video: How can carmakers attract investment?

Autovista Group chief economist Dr Christof Engelskirchen and director of automotive agency Car Design Research, Sam Livingstone, discuss how investors value car-producing technology companies above traditional OEMs. As more new entrants come into the automotive industry, what options do traditional players have to engage and attract investment?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Video: Do January’s European car registrations point to a recovery?

Autovista Group Daily Brief editor Phil Curry discusses the latest registration figures in Europe’s biggest automotive markets. Are there indications of improvement on last year’s performance?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Deceptively shaky start to 2021 new-car registrations across Europe

Germany: new-car registrations down 31% in January 

UK new-car market suffers ‘worst start to the year since 1970’

EU new-car registrations suffer biggest fall since May 2020

Autovista Group senior data journalist Neil King explores the January 2021 new-car registration figures released by the European Automobile Manufacturers’ Association (ACEA). Two fewer working days, compounded by lockdowns and taxation changes in some markets, depressed the regional result. However, the mitigating circumstances and positive results in other countries give reason for cautious optimism.

New-car registrations in the EU declined 24% year-on-year in January. Volumes fell below 730,000 units, down from over 950,000 registrations in January 2020. This was the severest monthly decline in the market since May 2020, when the market contracted by more than a half as the first wave of COVID-19 lockdown measures were only starting to ease across Europe.

EU new-car registrations, year-on-year % change, January 2020 to January 2021

EU-Neuzulassungen, Veränderung gegenüber dem Vorjahr in %, Januar 2020 bis Januar 2021

Source: ACEA

The severe EU-wide downturn in January was expected given the double-digit year-on-year declines in Italy and Spain, as well as in Germany.

With just 41,966 new cars registered during the month, Spain endured a dramatic market contraction of 51.5% compared to January 2020. However, adjusted for the two fewer working days, the year-on-year decline was about 43%. Storm Filomena also affected registrations activity. Furthermore, the December figures were buoyed by consumers taking advantage of the RENOVE scrappage scheme before it ended on 31 December. Similarly, the increase in vehicle registration taxes from 1 January brought demand forward into the tail end of 2020. Autovista Group estimates that about 10,000 registrations were lost last month as a result.

New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Restrictions were originally in place until 14 February, but were subsequently extended to 7 March.

The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new-car deliveries in the country.

Lockdown measures also adversely affected dealer activity in other European markets last month. Consequently, new-car registrations declined by more than 20% year on year in Austria, the Netherlands and Portugal.

Cautious optimism

In Italy, the year-on-year downturn in January was 14%. This was the fourth consecutive monthly decline in the country following growth in September due to the government scrappage incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). These have been exhausted, but the negative effects are being counterbalanced by new purchase incentives to renew the Italian vehicle fleet with less polluting and safer cars, introduced on 1 January. Adjusted for working days, the market only declined by about 6% in the month.

New-car registrations were 5.8% lower in France in January 2021 than in the same month of 2020, according to the latest data released by the CCFA, the French automotive industry association. This is a significant improvement on the 27% contraction in November, when dealers were closed for most of the month, and the 11.8% year-on-year downturn in December. Moreover, there were two fewer working days in January 2021 than in January last year and, adjusted for working days, the CCFA calculates that registrations actually rose by 3.6% in the month.

All EU new-car markets contracted last month, with the exception of Sweden, which posted year-on-year growth of 22.5%. When adjusted for working days, however, Autovista Group estimates that the EU-wide downturn in January was 16%. The adjusted modest decline in Italy and growth in France especially give grounds for cautious optimism in 2021.

The fallout from COVID-19 is expected to continue to affect vehicle markets across the continent during the first quarter of 2021. However, as vaccination programmes progress and restrictions gradually ease as a result – hopefully never to return – registrations should pick up in the second half of the year.

The European Union’s new-vehicle registration recovery will begin this year with an increase of 10% compared to 2020, according to a forecast from ACEA. A 10% increase equates to 10.9 million new cars on EU roads this year, higher than the 9.9 million registered in 2020. Nevertheless, that is still 16% down on 2019, the last full year of non-COVID-19 impacted sales.

Manufacturer performance

All the leading European carmakers registered fewer new cars in the EU in January 2021 than in January 2020, except for Volvo. The Swedish manufacturer registered 9.4% more new cars than a year earlier, buoyed by the growth at home.

Mitsubishi and Honda suffered the greatest losses in the month, with registrations down by 63% and 50% respectively year on year. The BMW and Daimler groups both suffered modest declines of 14% in the month, ahead of Toyota, which was the strongest performer in 2020.

Across Europe, Autovista Group expects manufacturers with a strong electrified portfolio will perform comparatively well in 2021 as consumers are less likely to be tempted by used examples. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest hybrid and electric models on the used-car market.

Autovista Group has outlined its key predictions for the year ahead, focusing on new-car registrations, used-car demand and residual values, and tech advances.

Launch Report: Hyundai Tucson – bolder and roomier

The new Hyundai Tucson has an assertive and bold design, with its front face combining the headlights and grille. The 3D rear-light signature echoes the progressive triangular headlight design and two-tone colour personalisation is now possible. As the new Tucson is longer and wider, it is roomier and more practical than its predecessor and has a large boot.

The modern and refined digital cockpit, featuring a flush-fitting 10-inch screen, is standard across the range and there is also a digital TFT screen directly in front of the driver. The materials, trim and build quality are all good and there are numerous ADAS and safety features, including a central airbag between the two front seats. A neat touch is the blind-spot monitoring system, which shows a digital feed from the left or right side of the car, depending on which direction is indicated.

The Tucson is offered with mild-hybrid (MHEV) petrol and diesel engines or as a full hybrid-electric vehicle (HEV), and a plug-in hybrid (PHEV) version will be available too. The trim lines are well composed and there are relatively few options, leading to well-equipped used cars.

With the leap forward in quality and roominess compared to its predecessor, the Tucson has the potential to attract a wider selection of consumers. The HEV version may present an attractive business proposition for buyers who are not yet ready to plug in.

Click here or on the image below to read Autovista Group’s benchmarking of the Hyundai Tucson in France, Germany and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch Report: Hyundai Tucson

Surging demand for new BEVs mounts pressure on residual values

Residual values (RVs) of battery-electric vehicles (BEVs) in the big five European markets are lower than they were at the onset of the COVID-19 pandemic, in both value and retention (RV%) terms, except in the UK. Senior data journalist Neil King explores the latest developments and the challenges for used BEVs.

Registrations of BEVs in the European new-car market, comprising the EU and the UK, grew by 126.5% compared to 2019, to almost 650,000 units. However, the surge in demand for new BEVs is not reflected in Europe’s used-car markets. Consequently, their RVs after 36 months and 60,000 kilometres were weaker in January 2021 than when COVID-19 took hold in March 2020, except for modest growth in the UK.

‘New BEV sales have risen sharply to company-car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used buyers. However, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values,’ explained Jonathan Brown, car editor at Glass’s in the UK.

Residual-value development of BEVs, big five European markets, March 2020 to January 2021

Restwertentwicklung von BEVs, große fünf europäische Märkte, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

These developments are in stark contrast to activity across the whole market. In 2020, new-car registrations in the EU and the UK suffered an overall decline of more than 3.7 million registrations due to COVID-19, equating to a loss of a quarter of the volume. Buoyed by resilient used-car demand, RVs of all cars in the 36-month/60,000km scenario in the big five European markets had returned to pre-COVID-19 levels by mid-November 2020.

Oversupply risks

With price pressure on used BEVs already mounting, this amplifies the question; Who will buy Europe’s used-electric cars? Through a combination of government incentives, improved infrastructure, extended ranges, more choice, and the fear of CO2-emissions fines, forecasts point to electrically-chargeable vehicles gaining a market share of around 40% in Europe by 2030, 80% of them being BEVs. For BEVs alone, that creates a €92 billion remarketing challenge, which needs to be addressed.

Unless demand for BEVs gathers pace in Europe’s used-car markets, RVs will continue to suffer and there is a risk of oversupply to EV-import markets too. As yet, there are currently no signs of saturation on these markets, and the demand for BEVs in Norway, for example, is expected to grow by 13% annually over the next five years, according to Rødboka (part of Autovista Group) in Norway. However, this may no longer be sufficient to resolve the RV conundrum created by the government incentives for EVs across Europe.

‘Continuing the current government policy will continuously add pressure to the used EV market as volumes are still pushed. The ability of Norway, for example, to absorb German EVs has a very limited impact on the upcoming local problems, though it ‘helped’ in the past. The entire Norwegian new-car market is about 150,000 vehicles a year, so let’s assume they take 100,000 used cars up to four years of age per annum. Germany alone ‘produced’ 230,000 used EVs in 2020, with different future ages, depending on whether they were fleet or tactical registrations. Thinking optimistically of 60% being absorbed locally, how many of the remaining 90,000 used cars should Norway import to solve our volume problem? And registrations of new EVs are still growing,’ cautioned Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Diverging values

RVs of BEVs are below those of petrol cars in all the big five European markets, except Italy. Even here, however, the gap has narrowed to BEVs only having a 0.7 percentage point (pp) advantage over petrol cars, compared to 4.6 pp in March 2020. Furthermore, the new purchase incentives for BEVs, introduced by the Italian government on 1 January 2021, will reduce their used prices and this minor advantage is therefore expected to turn negative imminently.

RV% development of petrol cars and BEVs, Italy, March 2020 to January 2021

RV% Entwicklung von Benzin-Pkw und BEVs, Italien, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

In the other major European markets, the RV disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under 4 pp and stood at 10 pp in January 2021.

The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020, supporting the assumption of a forthcoming negative impact on values of BEVs in Italy. The federally-backed buyer incentive scheme doubled to €6,000 for BEVs costing less than €40,000, such as the Volkswagen ID.3. When paired with the manufacturer bonus of €3,000, customers are able to save €9,000. BEVs with a net price between €40,000 and €65,000, like the Audi e-Tron Sportback, are eligible for €5,000 in government subsidies, alongside a €2,500 OEM bonus.

‘COVID forced the German government to support the ‘suffering’ automotive industry. And as it wasn’t popular to drive internal-combustion engine (ICE) sales, they decided to make a push on BEVs and plug-in hybrids (PHEVs), but not standard hybrids (HEVs), by doubling the incentives. But the lack of used-EV support puts double pressure on RVs by lowering transaction prices of new EVs with the incentive, while not incentivising used examples,’ Geilenbrügge emphasised.

RV% development of petrol cars and BEVs, Germany, March 2020 to January 2021

RV%-Entwicklung von Benzin-Pkw und BEVs, Deutschland, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

The biggest gap in RVs between BEVs and petrol cars remains in France. The difference in January 2021 stood at 18.6 pp, although this is only slightly wider than the 17.9 pp gap in March 2020. On a positive note, this sizeable gap in France should at least stabilise following the introduction of a €1,000 incentive for used BEVs on 1 January.

‘Despite the introduction of the bonus on the used-car market, sales of used BEVs remain low. France is still lacking charging points and 25% of them are out of order, which is not supporting the development of the used-car market. The only impact of the bonus, from my point of view, would be to stabilise RVs a bit more,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

RV% development of petrol cars and BEVs, France, March 2020 to January 2021

RV% Entwicklung von Benzinautos und BEVs, Frankreich, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

Autovista Group is hosting an online seminar on the remarketing risk of electric vehicles on 23 February – join here.

Head-up display: gimmick or godsend?

As in-car displays grow in size and scope, the amount of attention they can draw away from the road increases. While some infotainment systems feature touchscreen with haptic feedback, designated control wheels and voice-activated commands, there looks to be a more transparent solution. Are head-up displays (HUDs) the safety feature consumers never knew they needed, or just another gimmick to get in the way? Autovista Group Daily Brief Journalist Tom Geggus goes looking for answers.

The list of cars featuring HUDs is growing, from the Jaguar I-Pace to the Hyundai Kona. These displays are getting smarter too with the implementation of augmented reality (AR), like in the Mercedes-Benz S-Class and Volkswagen ID.3. Panasonic got in on the action as well, revealing its own AR HUD at CES 2021. This rapid uptake is predicted to push the technology’s market value over $9.8 billion (€8.1 billion) by the year 2027, according to Yahoo Finance.

Mike Juran
Mike Juran, Altia CEO

The boom is set to reach far beyond passenger cars, as holographic displays pop up in commercial vehicles. Altia Design Research Lab showcased its heavy goods vehicle (HGV) HUD at CES this year.

Built alongside the Texas Instruments DLP team and Ceres, it features a long list of capabilities, including advanced driver-assistance system (ADAS) warnings, bridge-height information, battery temperature cautions, front blind-spot detection and turn-by-turn directions. In an interview with Autovista Group’s Daily Brief, Altia’s CEO Mike Juran explained why a commercial setting demonstrates not only what a HUD is capable of, but where it could yield the some of its most promising results.

‘Combining the HUD with the truck is solving one of our bigger problems on the road, as it relates to safety, productivity and driver engagement,’ said Juran. ‘If we did nothing in the next several years and could outfit all of these heavy trucks with HUDs, and then move that into the passenger vehicle space, I think we will have done society a great service.’

Heads up

George Palikaras
George Palikaras, META CEO

Alongside intelligent personal assistants, autonomous driving capabilities, and solar-powered cars, holographic displays belong to a near-sci-fi class of vehicle technology. So how does this futuristic system work in practice, and what is involved in developing it?

Smart materials and photonics company, Metamaterial Inc (META), designs and manufactures advanced materials and performance function films engineered on a nanoscale, all to control light.

The company fabricates its own holographical combiners, a key component in a HUD’s optical system. Therefore, META’s president and CEO, George Palikaras, is in a perfect position to help illuminate the complexities of these transparent displays, and what they have to offer.

Palikaras told Autovista Group’s Daily Brief that it is important to recognise how many technologies are involved when it comes to HUDs. While the driver might only see one seamless display in front of them, this projection is the result of multiple systems all working together, from augmented-reality software to the projector.

The performance of these elements can then vary depending on what they are made of. ‘Are you using glass? Are you using plastic? Are you guiding the light? Or are you reflecting the light off a surface?’ Palikaras asked. ‘So, there are considerations when it comes to the methodology of controlling the light, and that is one of the things that we specialise in at META.’

A high bar

Other sectors have not missed the potential of holographic technology. Smart eyewear has drawn the attention of major consumer electronics companies. For example, in June last year smart-glasses developer North was acquired by Google, even after the internet giant’s turbulent experience with its own attempt at eyewear called Glass, which is now confined to industrial applications.

Not unlike the consumer-electronics sector, the automotive industry has also seen numerous attempts to develop holographic displays since GM first debuted the technology in 50 of its 1988 Oldsmobile Cutlass convertibles.

But as the automotive industry travels further down the digital rabbit hole, crossovers like these will only multiply. This could benefit the development of transferable systems as carmakers team up with tech companies to pool knowledge and resources. However, it also sets the automotive industry on a direct collision course with consumer electronics, as both sectors vie for essential components to build more advanced systems, as can be seen with the current semiconductor shortage.

Development is even tougher for vehicle-based holograms, Palikaras explained. It all comes back to safety because, unlike in the consumer electronics sector, materials used in a car must be qualified. ‘That means that they have to be tested rigorously, in extreme conditions. More than 100 degrees centigrade, 100% humidity,’ he said. This is so the display could last the lifetime of a vehicle without failing and potentially putting the driver and everyone around them at risk.

Furthermore, HUDs must avoid creating their own safety risks. Holographic gratings and optical elements are known to cause flares, when light comes in at a particular angle, gets captured by the hologram and appears in front of the driver in a rainbow-like flash effect. To mitigate what is fundamentally a physics problem, the materials within the HUD need to be controlled Palikaras said.

‘How did you do that?’ he asked. ‘Well, we do that at meta, because we understand how light interacts with the nanoscale. We can pattern, the glass or the hologram in such a small minute level to fix these challenging problems.’

Safety first

While HUDs should be built to stand the test of time, to outlast challenging conditions and to ensure road safety, consumers also need to see the benefits of such a system. After all, why pay a premium for a device whose functions are already covered by the speedometer and instrument dial. With the inclusion of AR, developers are revealing just how transformational this technology could be to automotive safety.

By tying different vehicle sensors to the HUD, the display becomes capable not only of projecting speed and directions but also visually integrating cues. This can include transparent directions that overlay the road ahead so the driver knows exactly where to turn, avoiding confusion and potential journey disruption. This application is already showcased in vehicles like VW’s ID.3.

As can be seen with Panasonic’s latest offering, by equipping these displays with sensor data, the potential safety advantages are numerous. ‘Imagine you’re driving at night, and the infrared sensor that can see through the darkness sees an animal that potentially will cross your path on the highway,’ Palikaras said.

‘You would have not seen that animal crossing,’ he continued. ‘And now you have the ability, not only for the sensor to pick it up. But to show you exactly where the animal is with a little red box highlighting it.’ While some sensors are capable of seeing what a driver may not, the AR HUD is the medium through which the driver is kept in the loop.

‘The future’

So, are HUDs a gimmick? Not according to Palikaras. ‘I think it is the future, he said. ‘Once companies start collaborating with each other to come up with solutions, that is where I think the magic will happen.’

As large developmental strides are being taken in the automotive industry, HUDs are not solely about removing the need for the driver to look down at the instrument panel. Now they are capable of providing additional information which could prevent a collision that might have otherwise happened. If this technology can save even one life, surely it must be considered a godsend.

Podcast: Jumpstarting 2021 – registrations, electromobility and shows

The Autovista Group Daily Brief team takes a look into some of the biggest automotive news stories of the past fortnight. Phil Curry and Tom Geggus discuss January’s new-car registrations, how carmakers like Ford, Hyundai, and Daimler are tackling electromobility, and whether there should be automotive shows this year.

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Show notes

EU new-car registrations to start recovery in second half of 2021

Deceptively shaky start to 2021 new-car registrations across Europe

Germany: new-car registrations down 31% in January

UK new-car market suffers ‘worst start to the year since 1970’

EVs make great strides across European markets in 2020

Ford trebles size of UK EV-charging network

Hyundai boosts zero-emission mobility

Daimler to become Mercedes-Benz as it spins off truck business

Will there be a physical motor show in 2021?

Germany: new-car registrations down 31% in January

New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. A total of 169,754 passenger cars were registered according to the latest figures from the country’s automotive authority, the Kraftfahrt-Bundesamt (KBA).

This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Germany is the largest European market affected in January, with the restrictions currently in place until 14 February.

The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new cars’ deliveries in the country last month.

New-car registrations, Germany, y-o-y % change, January 2020 to January 2021

Pkw-Neuzulassungen, Deutschland, Veränderung in % gegenüber dem Vorjahr, Januar 2020 bis Januar 2021

Source: KBA

There were two fewer working days in January 2021 than in January last year. On a comparable working-day basis, Autovista Group estimates that registrations fell by about 23% in the last month, and annualised new-car demand was at 2.94 million units. As in France, Spain and Italy, the start to 2021 of Germany’s new-car market has been deceptively shaky.

Given the mitigating factors in January, this bodes relatively well for the German market, which Autovista Group currently forecasts will recover to 3.15 million units in 2021, 8% up on 2020. This is at the same level as the German automotive industry association VDA forecasts. However, the VDA rightly highlighted that 2021 will still be ‘significantly lower than the approximately 3.5 million new registrations of the years 2017 to 2019.’

‘We assume that the second half of 2021 will bring an improvement, if the progress in vaccination is so great that the pandemic can be noticeably contained in everyday life,’ commented VDA president Hildegard Müller. This echoes the EU-wide sentiment expressed by the European Automobile Manufacturers’ Association (ACEA). ‘The year 2021 will decide the future of the industry in Germany and Europe. We are at a turning point that will set the direction for the following decades,’ Müller added.

Brands and segments

German brands reflected January’s negative performance. Audi (down 47.4%), Mini (down 41.5%), and Ford (down 41.1%) saw the most significant declines. Meanwhile, Porsche posted the smallest losses, with a drop of 3.9%. Volkswagen maintained the largest market share, of 20.1%.

Among the imported brands, Tesla and Volvo exceeded their registration results for the same reporting period in 2020, up 23.4% and 9.4% respectively. In contrast, declines of more than 70% were seen at Jaguar and Honda (down 77.9% and 70.1% respectively), while Fiat recorded the smallest decrease of 14.8%. Skoda was the strongest imported brand for market share, with 6.7% of registrations.

Motorhomes were the only segment to achieve growth, of 5%, to capture a market share of 1.9%. Meanwhile, small MPVs saw the most severe decline at 63.6%, and full-size MPVs fell 55.3%, sports cars slumped by 43.2% and utility vehicles dropped by 42%. SUVs were the strongest segment with 21.9% of the market, despite a decrease of 26.4%, followed by the compact segment with a 19.1% share, down 32.2%.

Fuel types

Registrations of petrol-powered cars fell by half (50.3%) in January 2021 compared to the previous reporting period, taking 37.1% of the market. Diesel also dropped by 44.8%, representing just over a quarter of new cars (26.1%). In contrast, electrically-chargeable vehicles (EVs) saw year-on-year growth of 117.8%, with a total of 16,315 new units registered, taking their share to 9.6%.

Some 45,449 hybrids were registered in January, up 47.5%, while securing 26.8% of the market. A total of 20,588 plug-in hybrid units were registered in January, up 138.3%, with a 12.1% share. Natural gas (259) and liquefied gas (340) only accounted for 0.2% of the market last month, recording a combined decrease of 35.5%. The average CO2 emissions of newly registered cars was 125.9 g/km, representing a decrease of 16.9%.

The tipping balance towards EVs, and away from internal combustion engines (ICE), follows on from a trend recorded last year. In 2020, alternative drives made up of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations. The German government set out COVID-19 recovery plans as a springboard towards a greener economy, with a greater emphasis on electromobility. In November, it committed a €4 billion stimulus package to the automotive sector, with funds channelled into the adaptation of production lines and incentivising the purchase of EVs.

Semiconductor shortages stunt automotive recovery

Vehicles are becoming smarter by the day, from automation to personalisation. But a major building block in these digital developments has hit a bottleneck. Autovista Group Daily Brief journalist Tom Geggus explores the world of semiconductors. Why is there a shortage, which OEMs have been affected, and how could this impact an automotive COVID-19 recovery?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Semiconductor shortage disturbs manufacturing

Semiconductor shortage continues to impact automotive production

Germany looks to Taiwan for semiconductor solution

EU new-car registrations plunged 24% in 2020

Deceptively shaky start to 2021 new-car registrations across Europe

The European new-car markets of France, Italy and Spain all contracted in January 2021, compared to the first month of 2020. However, the shaky start to the year is deceptive for numerous reasons, explains Autovista Group senior data journalist Neil King.

The resurgence of COVID-19 cases and the economic repercussions continue to suppress the new-car markets of France, Italy and Spain. Registrations declined again year on year in January in all three countries, according to data released by the respective automotive trade associations.

New-car registrations, France, Italy and Spain, y-o-y % change, January 2020 to January 2021

Pkw-Neuzulassungen, Frankreich, Italien und Spanien, Veränderung gegenüber dem Vorjahr in %, Januar 2020 bis Januar 2021

Source: CCFA, ANFIA, ANFAC

New-car registrations were 5.8% lower in France in January 2021 than in the same month of 2020, according to the latest data released by the CCFA, the French automotive industry association.

This is a significant improvement on the 27% contraction in November, when dealers were closed for most of the month, and the 11.8% year-on-year downturn in December. Moreover, there were two fewer working days in January 2021 than in January last year and, adjusted for working days, the CCFA calculates that registrations actually rose by 3.6% in the month.

On an annualised basis, adjusted for working days, demand was above 1.9 million units in January. Demand will come under some pressure later in the year as incentives for battery-electric vehicles (BEVs) will be reduced by €1,000 from 1 July. However, assuming no further COVID-19 restrictions on dealerships in France, Autovista Group forecasts that the new-car market will grow by 18% in 2021, following the 25% contraction in 2020, to about 1.95 million units.

Fourth consecutive monthly decline in Italy

In Italy, the year-on-year downturn in January reported by the industry association ANFIA was 14%. This is the fourth consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations in September due to the government scrappage incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). These have been exhausted, but the negative effects are being counterbalanced by new purchase incentives to renew the Italian vehicle fleet with less polluting and safer cars, introduced on 1 January. Adjusted for working days, the market only declined by about 6% in the month.

‘The opening month of 2021 was partly disadvantaged due to two fewer working days than in January 2020. Also, the first days of the month, with the last part of the holidays in the ‘red zone’, may have induced consumers to postpone purchases, despite the full activity of dealers, while the ongoing government crisis added a further uncertainty factor in an already particularly difficult historical moment,’ commented ANFIA president Paolo Scudieri.

‘It is probable that, in the absence of the incentive measures that came into force on 1 January, the market results would have been worse. There is a lot to recover, but we are confident that we will see a gradual restart of demand in the coming months,’ added Scudieri.

Assuming the crisis in the Italian government is quickly resolved and, moreover, there are no further COVID-19 restrictions on dealerships in 2021, Autovista Group forecasts that the Italian new-car market will grow by 21% in 2021, to about 1.67 million units. This is a higher growth rate than in France, but Italy starts from a weaker base, with registrations down 28% in 2020.

New-car registrations, France, Italy and Spain, y-o-y % change, 2020 and 2021 (forecast)

Pkw-Neuzulassungen, Frankreich, Italien und Spanien, Veränderung in % gegenüber dem Vorjahr, 2020 und 2021 (Prognose)

Source: CCFA, ANFIA, ANFAC (2020), Autovista Group (2021 forecast)

Sweet-and-sour Spain

In Spain, just 41,966 new cars were registered during January, equating to a dramatic contraction of 51.5% compared to January 2020, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘There has not been a worse January since 1989, which had a monthly sales record like the current one,’ the industry body commented. However, adjusted for the two fewer working days, the market contraction was about 43%, and storm Filomena also affected registrations activity.

Furthermore, the December figures were buoyed by consumers taking advantage of the RENOVE scrappage scheme before it ended on 31 December. Similarly, the increase in vehicle registration taxes from 1 January brought demand forward into the tail end of 2020. Autovista Group estimates that about 10,000 registrations were lost in January as a result.

‘It can be said that the automotive market practically disappeared in January. Consumer confidence remains at a minimum, the relapse into the pandemic, with the consequent mobility restrictions, and the impact of storm Filomena have been decisive. To this, we must add that in December there were customers who advanced their purchase to avoid the registration-tax increase,’ commented Raúl Morales, communications director of the Spanish dealers’ association Faconauto.

‘January is not usually a month that stands out, but this year’s data highlight the delicate moment that the sector is going through and, what is more worrying, the difficult months that still lie ahead, at least during the first half of this year. Recovering demand is urgent to break this negative spiral. And we had the tool to achieve it: if the RENOVE plan had been continued, with some tweaking to improve it, we would surely be talking about minor drops and better prospects for the coming months,’ Morales added.

Nevertheless, ‘bitter-sweet’ Spain has definitely turned sour, and the higher WLTP-based taxes will continue to constrain new-car demand, especially in the early part of 2021. The poor economic outlook for Spain will also weigh heavily and the new-car market is expected to remain firmly below one million units in 2021. Autovista Group currently forecasts that demand will recover from the 32% loss in 2020, albeit only by 9% to about 930,000 units in 2021.

Launch Report: Opel/Vauxhall Mokka-e – clean design with quick charging

The Mokka-e introduces Opel’s (and Vauxhall’s) new design language, which presents clean lines that give the car a premium appearance. The new ‘Vizor’ front is especially distinctive with the lights and radiator, including the new brand logo, forming one cluster. The distinctive two-tone bodywork, differentiating the bonnet and the roof, offers multiple possibilities to personalise the vehicle.

The acceleration of the Mokka-e is rapid compared to most competitors with similar power output, going from 0-100km/h in 8.5 seconds, and the 50kWh battery gives it a range of 322 kilometres on the WLTP cycle. If buyers opt for the 11Kw on-board charger, the car can be recharged, using a 100kW DC fast-charger, to 80% battery capacity in 30 minutes.

The new ‘Pure Panel’ dashboard stands out in the interior, featuring either a 10-inch or 12-inch touchscreen, but there are also physical controls for the infotainment system and climate control. Good price positioning is coupled with a high level of standard equipment from the entry-level trim upwards. Even the basic version of the Mokka-e is equipped with climate control, an automatically-dimming interior mirror, and a light and rain sensor as standard. ‚Eco‘ or ‚Sport‘ driving modes and adaptive cruise control are also included, as are ‘Keyless Start’ and ‘Opel Connect’, with which drivers can request data about the car remotely via smartphone.

Click here or on the image below to read Autovista Group’s benchmarking of the Opel/Vauxhall Mokka-e in France, Germany, the Netherlands and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch Report Opel Mokka E

Dealer sales restricted in half of Europe’s car market

Europe’s car dealers continue to face COVID-19 restrictions, with dealerships in some markets currently closed, except for servicing, maintenance and repair (SMR) work and online ‘click-and-collect’ sales. Autovista Group analysis uncovers that about half of Europe’s automotive market is currently affected by dealer restrictions. Senior data journalist Neil King discusses the findings.

Across many European markets, dealers are open for business as usual, or rather ‘business as unusual’, with strict COVID-19 rules in place, such as the mandatory wearing of face masks and the use of hand sanitiser. New-car registrations will be less severely impacted in these markets, compared to those where dealers cannot open for the physical sale of cars. Nevertheless, they are clearly not escaping COVID-19, and the resulting economic impact, unscathed.

Of the 15 European markets under review, dealers have been least affected in Sweden and Finland, where showrooms have never closed throughout the pandemic. ‘There are restrictions on the number of people allowed inside at the same time, but not a full closure,’ commented Johan Trus, Autovista Group head of data and valuations, Nordics. This has translated into comparatively robust new-car registrations, which were down ‘only’ 18.2% and 15.6% respectively in 2020.

Dealers in Italy and Spain have not been affected since the end of the first lockdown period, in May-June 2020, and all dealers in France have resumed normal activity since December. However, this does not preclude governments introducing lockdowns again in the future.

‘There are currently many discussions about whether we should go into a tighter lockdown, like the one we had from March to May-June, but there is no agreement yet. Our economy has been badly damaged and the decision may be to continue with at least low business activity. There could be a few specific cases in particular locations, however, in general, dealers remain open,’ said Ana Azofra, valuations and insights manager at Autovista Group, Spain.

Physical closures across half of Europe

Six of the markets under review by Autovista Group are currently affected by restrictions on the physical sale of cars at dealerships; Austria, Germany, Netherlands, Portugal, Switzerland, and the UK. Based on 2020 new-car registrations, 46.3% of Europe’s car market, consisting of the EU and EFTA markets, as well as the UK, is impacted.

Dealer status, January 2021, and 2020 share of European new-car market

Händlerstatus, Januar 2021 und Anteil am europäischen Neuwagenmarkt 2020

Germany is the largest market where dealers are subject to physical closures, recently extended until 14 February. This is despite the fact that ‘wholesale and retail trade will remain open as far as possible. This includes grocery shops, pick-up and delivery services, beverage markets, pharmacies and drugstores, baby stores, medical and health-food stores, opticians, hearing-aid acousticians banks, post offices, dry cleaners and launderettes,’ clarified Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Pick-up and delivery services do not apply to car dealers, although cars can still be collected in numerous states. ‘Most dealers offer sales contact by phone/online and a delivery service for test drives and purchased vehicles. Interestingly, there is one state, Thuringia, that has been able to keep car dealerships open,’ added Geilenbrügge.

Collection restrictions

In the other markets where dealers face restrictions, cars ordered online can be delivered but limitations on collection vary.

For example, in Austria and Switzerland, ‘the sale, handover and registration of a vehicle is still possible via click-and-collect but this has to be contactless,’ explained Robert Madas, Autovista Group valuations and insights manager, Austria and Switzerland.

Cars cannot be picked up, but can be delivered to a home or a public place in the Netherlands. However, ‘there may be an extra measure, a curfew from 8:30pm to 4:30am, which could impact dealers in delivering new and used cars at the customer’s home or in a public place,’ commented Nico VanHalst, Autovista Group residual value manager, Netherlands.

The pick-up and collection of cars is still permissible across the UK, although this has only been possible from an outdoor location in Scotland since 16 January, with deliveries direct to customers the only option prior to this.

Dealers in Portugal are the latest casualty, with changes introduced on 15 January that included the closure of car dealers, except for online sales. The restrictions on physical transactions by dealerships are expected to be more short-lived than in other affected markets. ‘The lockdown should end this week, on 30 January, as the maximum lockdown period allowed is 15 days and we are already in the second week,’ said Joao Areal, editorial manager of Autovista Group, Portugal.

‘However, these measures were changed in the middle of the month and I think they will continue with a new 15-day lockdown period starting on 31 January,’ he added.

Registrations implications

Following double-digit declines in new-car registrations in Europe in 2020, the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. In markets where dealers are closed for physical car sales, a return to the year-on-year declines of about 30% seen in France and the UK in November, when lockdowns were in force, can be envisaged.

Even in markets where dealers remain open, demand may not fare much better in the short term. In Belgium for example, ‘business volume looks rather disappointing, listening to dealers, despite what is loudly claimed. Forecasts are for a decline of 30% versus January last year, and the first quarter of 2021 should be down around 10% to 15%. The focus for brands is maintaining market share at all costs,’ commented Idesbald Vannieuwenhuyze, Autovista Group chief editor and valuations manager, Benelux.

However, ending on a more positive note, the development of online car-sales solutions, supported by ‘click-and-collect’ services and home delivery and test drives, has dramatically reduced the impact on registrations, which suffered losses around 90% in many markets during the first wave of lockdowns in 2020. These measures also have a positive effect, even when dealer activity is not restricted, as consumers increasingly prefer to shop online than at a physical location, including for cars.

‘Dealers have never been closed in Poland, but they still developed online solutions to reach more customers. For example, in Spring 2020, they offered vehicle delivery door-to-door to test and to buy. The bigger problem was the closure of registration offices, but this happened only at the beginning of 2020. The time to register used vehicles was also prolonged, but it did not block sales,’ commented Marcin Kardas, head of the Autovista Group editorial team in Poland.

Autovista Group has outlined its key predictions for the year ahead, focusing on new-car registrations, used-car demand and residual values, and tech advances.

A follow-up article will look in depth at the acceleration of online car sales during the pandemic.

Podcast: The big tech trends of CES 2021

Which automotive technologies stole the spotlight at CES 2021? Autovista Group’s chief economist Dr Christof Engelskirchen, Daily Brief editor Phil Curry, and journalist Tom Geggus review some of the big tech trends at this year’s show.

They discuss the unveiling of new electric models, batteries and bases. How futuristic concepts like autonomous vehicles and VTOLs are taking off, the growth of infotainment systems and how this year’s digital platform changed CES.

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Show notes

Five-minute-charge battery the answer to range anxiety?

CES 2021: The big automotive trends

CES 2021: Sono Motors unveils second-generation solar car

CES 2021: Panasonic looks ahead with augmented-reality HUD

CES 2021: Bosch focuses on sustainability and convergence

CES 2021: BMW showcases the latest iDrive system

CES 2021: Mercedes-Benz talks MBUX Hyperscreen

CES 2021: Indy Autonomous Challenge aims for extreme driverless testing

CES 2021: Mobileye to increase use of own autonomous technology by 2025

CES 2021: Magna champions LG venture as a new-entrant enabler

Five automotive tech advances to look forward to in 2021

Monthly Market Dashboard: Mixed RV movements across Europe in January

Autovista Group’s interactive monthly market dashboard (MMD) reveals a mixed picture of residual-value movements in January. Senior data journalist Neil King explores the analytics.

This month’s MMD reveals that the average residual value (RV) of cars aged 36 months and with 60,000km grew year on year in all the Big 5 European markets in January. However, values were lower than reported for December in France, and only rose modestly month on month in Germany and Spain. Italy and the UK enjoyed month-on-month pricing growth of 9.7% and 5.3% respectively.

RV retention, represented as a percentage, grew year on year in all markets except Germany. The highest growth in RV-percentage terms was in the UK, where the average was 48%, equating to an 8.4% change compared to January 2020. Compared to December, RV retention was lower in France and Germany, and rose by a modest 1.1% in Spain. Again, Italy and the UK enjoyed month-on-month pricing growth, of 9.9% and 2.9% respectively.

MMD Januar 2021

The UK enjoyed the strongest rally in used-car prices after Europe emerged from the first wave of lockdowns in summer 2020. This was driven by the release of pent-up demand, and a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply.

These RVs descended from their great height in late October as pent-up demand was broadly satisfied and new-car supply improved. However, with the UK back under lockdown restrictions as it seeks to stem a sharp rise in COVID-19 cases, and Brexit impacting new-car supply and prices, residual values are rising again.

Restrictions slow sales

Three-year-old cars are selling more slowly than a year ago in France, Spain and the UK. Moreover, the average number of stock days rose in all the major European markets over the last month, compared to December, as restrictions, including the closure of dealerships (except for online sales and servicing/repairs) in Germany and the UK, hinder transactions.

The greatest slowdown in the average number of days for 36-month-old cars to sell, compared to the December 2019 snapshot, was in the UK. Three-year-old cars are now moving on after an average of 48.5 days, up 14.5% from 40 days in December. This also means France is now the market with the quickest turnaround times, with cars selling after an average of 46.5 days.

The two fastest-selling cars in the major markets in January 2021 are both in Italy. The Dacia Duster and Volkswagen Polo are taking 26 days and 31 days respectively to find a new home. In third place is the Audi A1 in France, which needs just under 32 days to be rehomed.

Negative RV outlook

The new MMD also features the latest Autovista Group RV outlook for the major European markets. Despite the mixed RV movements in January, a downward trend is forecast in 2021, with prices of used cars in the 36 months/60,000km scenario declining in all the Big 5 European markets.

In the December update, the RV outlook was improved slightly for France and the UK, but values are still forecast to decline in 2021, by 0.4% and 1.4% respectively. Used-car prices are forecast to decline by 0.7% in Germany and 1.1% in Spain. The weakest outlook is for Italy, where RVs are forecast to be 3.9% lower than their current level at the end of 2021.

Click here or on the screenshot above to view the monthly market dashboard for January 2021.

EU new-car registrations plunged 24% in 2020

Autovista Group senior data journalist Neil King explores the December and full-year 2020 figures released by the European Automobile Manufacturers’ Association (ACEA). Second-wave lockdowns continued to suppress new-car registrations at the end of the year, but some markets were boosted ahead of tax changes from 1 January 2021.

New-car registrations in the EU declined 3.3% year-on-year in December. Volumes dipped to 1.03 million units, down from over 1.06 million units in December 2019. This was the least severe monthly decline in the market since September, the only month in the year that saw the market grow. As Autovista Group predicted in December, EU new-car registrations plunged by an unprecedented 23.7% in the year as a whole.

EU new-car registrations, year-on-year % change, January to December 2020 and year-to-date

EU-Neuzulassungen, Veränderung gegenüber dem Vorjahr in %, Januar bis Dezember 2020 und seit Jahresbeginn

Source: ACEA

The modest EU-wide downturn in December was expected as the double-digit year-on-year declines in France and Italy were counterbalanced with stability in Spain and growth in Germany.

In France, new-car registrations were 11.8% lower in December 2020 than in the same month of 2019. This is a significant improvement on the 27% contraction in November, the largest monthly decline in the country since May, as dealers reopened on 28 November following a lockdown.

New-car registrations declined 14.9% in Italy last month. Aside from restrictions in the country, the decline in December was also due to the exhaustion of scrappage incentives. Some consumers also postponed purchasing a new car as the Italian Parliament has approved an amendment to the 2021 Budget Law, which introduces new measures to renew the vehicle fleet with less polluting and safer cars.

In Spain, just 13 fewer new cars were registered than in December 2019, as consumers took advantage of the RENOVE scrappage scheme before it ended on 31 December. Similarly, the increase in vehicle-registration taxes from 1 January brought demand forward into the tail end of 2020. However, this is bitter-sweet for Spain as the new WLTP-based taxes will reduce demand, especially at the start of the year, and the market is expected to remain below one million units in 2021.

The German market ended 2020 on a marginally positive note. A total of 311,394 passenger cars were sold in December last year, up 9.9% on December 2019, partly fuelled by consumers beating the return to a VAT rate of 19% from 1 January. The rate had been reduced to 16% between 1 July and 31 December 2020.

However, the government imposed a strict lockdown again, meaning car dealerships have been closed since 16 December. This initially applied until 10 January, but climbing infection rates have triggered an extension of the country’s lockdown measures until the end of January. This makes a positive start to this year seem even less likely as dealerships must remain closed, except for the service departments. While Autovista Group’s Schwacke expects to see a recovery to just under 3.1 million new-car registrations in 2021, it predicts figures will be below those in previous years, and significantly below 2019’s peak.

New-car registrations, year-on-year % change, December 2020 and year-to-date

Neuzulassungen von Pkw, Veränderung gegenüber dem Vorjahr in %, Dezember 2020 und seit Jahresbeginn

Source: ACEA

The majority of EU new-car markets contracted last month, but eight smaller markets posted growth, in addition to Germany. Double-digit improvements were achieved in Denmark, Ireland, Lithuania and Romania. However, year-on-year contractions of more than 25% were reported in five markets; Bulgaria, Croatia, Latvia, Slovenia and Sweden.

The modest market downturn in December naturally continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among major EU markets was in Spain, which contracted 32.3% in 2020, ahead of only Portugal (down 35.0%), Bulgaria (down 36.8%) and Croatia (down 42.8%).

The prevalence of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout, will define how Europe’s new-car markets perform in 2021 and beyond.

Manufacturer performance

The majority of the leading European carmakers registered fewer new cars in the EU in December 2020 than in December 2019. Mazda and Mitsubishi suffered the greatest losses, with registrations down by more than a quarter year on year. However, the Volkswagen Group registered 9.7% more cars in the EU during the month than in December 2019, in line with the German market’s growth. Fiat Chrysler Automobiles (FCA) and the PSA Group, merged now as the new firm Stellantis, also managed to post year-on-year growth, of 9.3% and 2.9% respectively, but Toyota was the strongest performer by far, increasing registrations by 21.9%.

All manufacturers endured double-digit declines in 2020 as a whole, with only four containing losses to less than 20%; BMW Group, Hyundai-Kia, Toyota and Volvo.

Across Europe, Autovista Group expected manufacturers with a strong electrified portfolio to perform comparatively well as consumers are less likely to be tempted by the used electric vehicles coming through. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest hybrid and electric models on the used-car market. Toyota was the best-performing manufacturer in the EU new-car market, albeit with registrations down 12.8%, supporting this hypothesis.

Autovista Group has outlined its key predictions for the year ahead, focusing on new-car registrations, used-car demand and residual values, and tech advances.

CES 2021: The big automotive trends

There were plenty of automotive products and systems taking centre stage at CES 2021, which took place entirely online. Autovista Group Daily Brief editor Phil Curry and journalist Tom Geggus discuss developments from the show across the themes of electromobility, autonomous technology, infotainment and personalisation.

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Launch Report: Ford Mustang Mach-E – attractively positioned

Ford has used the Mustang name to widen the appeal of the new Mach-E electric SUV. The model incorporates some Mustang design elements, such as the light signatures, and there is not a Ford badge anywhere on the car, just the Mustang logo. The car is quite attractive by SUV standards, and the roofline is disguised using the body colour instead of black, giving it more of a coupé profile. There are many quirky touches, such as replacing the door handles with a digital button on the B-pillar that activates when the key is detected.

The Mach-E has a spacious, modern interior with an upright 16-inch touchscreen and a 10-inch digital screen in front of the driver, which helps keep the eyes on the road. Standard equipment is comprehensive and the large boot is supplemented with storage space in the front for the charging cable, for example. The model is nice to drive and handles well due to its convincing chassis, the ‘one-pedal’ driving mode is well calibrated, and the engine braking is very efficient. The claimed range is very good, especially for the extended-range rear-wheel-drive version, which manages 610km under the WLTP test cycle.

The Mustang Mach-E is not a cheap car, priced similarly to the Tesla Model 3, but has interesting positioning. It is larger and more powerful than offerings from volume manufacturers, such as the VW ID.4 and Skoda Enyaq, but at a higher price point, and is less expensive than similarly powered and sized premium models like the Jaguar I-Pace, Audi e-Tron and Mercedes-Benz EQC.

Click here or on the image below to read Autovista Group’s benchmarking of the Ford Mustang Mach-E in France, Germany, and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Grafik Restwerte Ford Mustang Mach-E

Used-car markets and RVs under limited pressure in 2021

Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on used-car demand and residual values in this second part.

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020, but used-car transactions exhibited more resilience. The exception is Italy, which suffered the same year-on-year in used-car transactions in Italy as new-car registrations, 27.9%, according to industry association ANFIA.

In contrast to the dramatic 29% decline in new-car registrations, used-car transactions in Spain declined by 12.8% in 2020, to 1,963,053 transactions, according to GANVAM, the Spanish dealers’ association.

‚The used-car market in Spain is always more favoured than the new-car market in times of crisis. Sales fell by only 13% in 2020, and the age structure of these sales has changed substantially in recent months and will continue to do so throughout 2021. The most notable change is undoubtedly the lower prevalence of young used cars in the market, caused by the standstill in tourism and the lack of renewal of rental fleets. In 2021, we also expect a greater share of electric vehicles in the used-car market, which accounted for just 0.2% of total sales in 2020,’ explained Azofra.

In the UK, used-car sales data are not yet available for full-year 2020, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters. Autovista Group estimates that used-car transactions were 15% lower in the year as a whole. This is only about half the contraction suffered by the new-car market. Used-car transactions are naturally expected to improve in 2021, but with a lower growth rate than new-car registrations.

Used-car transactions in France declined by a modest 3.8% in 2020, compared to a 25.5% fall in the new-car market, according to industry association CCFA. ‘The demand for diesel cars on the used-car market is still high while the supply is lower and lower, but petrol sales, which account for about 40% of total used-car sales, reached a maximum in 2020,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. Limited growth, if any, is therefore expected in 2021.

Slight improvement for Germany

Even in Germany, where the used-car market declined by only 2.4% in 2020, according to the KBA. Schwacke expects a slight improvement in used-car sales compared to 2020. ‘The used-car business was quite successful over the past 12 months under the circumstances and sold slightly more than seven million cars by the end of the year. The forecast for 2021 is the same – around seven million cars,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Europe: new-car registrations and used-car transactions, year-on-year % change, 2020

Europa: Neuzulassungen und Gebrauchtwagen-Transaktionen, Veränderung in % gegenüber dem Vorjahr, 2020

Source: CCFA, KBA, ANFIA, GANVAM, SMMT

(Note: UK is estimated, based on the latest data)

RVs grow in 2020, face limited pressure in 2021

Autovista Group’s COVID-19 tracker shows that the index of residual values (RVs) finished 2020 at or above pre-crisis levels in all of Europe’s major markets. The measurements began in February, with an index value of 100.

Grafik: Restwertprognose 2021

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

Residual values have peaked, however, and have declined in recent weeks. Looking to 2021, ongoing COVID-19 restrictions and the economic impact, as well as the aversion to public transport, will support used-car demand. Autovista Group therefore predicts that residual values will only come under limited pressure.

Spain: difficult year

The tax rise in Spain, with the introduction of WLTP-based emissions figures, and the end to the RENOVE scrappage scheme will hinder new-car demand and means RVs may increase slightly in value terms in Spain, but a 1.1% decline is forecast in terms of trade percentage, i.e. value retention, in the standard 36-month/60,000km scenario.

‘We foresee a difficult year for the sector, especially in terms of new-car sales. However, used-car sales will resist the onslaught of the crisis better and only their average residual values will be slightly affected.’ Azofra emphasised.

‘Electric vehicles will experience greater pressure on their transaction prices in the used-car market. On the one hand, their price is still very high, which is an important market barrier, even more so in crisis circumstances such as the present. On the other hand, demand is trying to be stimulated through incentive schemes, so it will be difficult to maintain their used-car price. In addition, the recharging infrastructure is still insufficient, the poorest in the big five European countries, which reduces their development space in the used-car market. With regard to the rest of the engines, we estimate small negative adjustments in petrol and diesel vehicles and greater stability for hybrid engines, which are in increasing demand.’

The end to Brexit uncertainty could serve as a positive for the UK’s new-car market, but deliveries may be affected and price rises are expected as the share of components in some engines will invariably exceed the ‘locally-sourced’ threshold. It is an incredibly difficult call but Glass’s, the UK arm of Autovista Group, forecasts a 1.4% decline in the RVs, in trade percentage terms.

Schwacke points out that fleet registrations from 2017/2018 declined somewhat in Germany and there were also almost 400,000 tactical registrations less from 2020, of which usually two thirds are sold to end customers as young used vehicles in the year after first registration.

Stable demand

‘In view of the expected stable demand, this is definitely a plus point for price development in the coming year, but supply volume will probably struggle,’ said Geilenbrügge. The return to a 19% VAT rate on new cars will also affect RVs, but a modest decline of 0.7%, in trade percentage terms, is forecast for used cars in the 36-month/60,000km scenario.

The tax changes in France, which penalise petrol cars more than diesels, and incentives for EVs present a mixed picture. ‘In 2021, there is a clear risk of having a new-car market in contradiction with the used-car market. For CO2 reasons, the fuel types that are driving the new-car market are not the most attractive ones on the used-car market. Lower supply will reduce the RV pressure on petrol cars, and the sales stop of powerful diesel engines, which are well demanded on the used-car market will especially support RVs of these specific vehicles. The high prices and bonus for EVs still impacts RVs, especially at 12 months, but the €1,000€ bonus reduction in July 2021 will support RVs more positively,’ explained Taitz. Overall, the latest RV outlook for France calls for a minimal drop of 0.4% in the prices, in trade percentage terms, of used cars.

The poorest RV outlook is in Italy, where used cars have not weathered the COVID-19 storm better than new cars and the introduction of additional incentives for new cars will apply more pressure on used-car demand and residual values. RVs of used cars in the 36-month/60,000km scenario are currently forecast to fall by 3.9% in trade percentage terms.

In a first part, King discussed Autovista Group’s predictions for new-car registrations in Europe’s major markets in 2021.

COVID-19 and other market factors breed caution for 2021

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020 and the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. Automotive-specific factors will also determine the extent to which markets bounce back in 2021. Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on new-car registrations in this first part.

Despite the new-car market stability in December, Spain still contracted more than the other major European markets in 2020. This does not automatically mean it will enjoy the highest level of growth in 2021. The end of the RENOVE scrappage scheme on 31 December 2020 and higher, WLTP-based registration taxes from 1 January 2021 pulled demand forward into 2020. Furthermore, with no improvement in Spain’s crucial tourism sector, and therefore the wider economy, envisaged in the near future, new-car registrations in Spain are expected to recover at a slower rate than in the leading European markets, except Germany.

‘A very tough first half of the year is expected, and a start to the recovery in the second half of the year. In any case, the recovery will be slow, and we do not expect new-car volumes to reach figures similar to those of 2019 for at least three years,’ commented Ana Azofra, valuations and insights manager at Autovista Group in Spain.

The recovery in Germany is forecast to be rather limited, not only because it starts from the highest base, declining by only 19% in 2020, but also as new-car demand will be slightly hampered by the return to a VAT rate of 19%, up from the reduced rate of 16% that was in effect from 1 July to 3 December 2020. The smaller quantities of newly launched high-volume vehicles in 2021, and the reduction in the range of products due to the threat of CO2 fines, will also have an impact. However, regained production capacity, as well as the significantly lower availability of very young used cars, should act as positive effects. Autovista Group’s Schwacke is cautiously optimistic for 2021 and forecasts a recovery to just under 3.1 million units, equating to growth of 6%.

New-car registrations, major European markets, year-on-year % change, 2020

Pkw-Neuzulassungen, wichtigste europäische Märkte, Veränderung gegenüber dem Vorjahr in %, 2020

Source: CCFA, KBA, ANFIA, ANFAC, SMMT

Post-Brexit Britain, incentivised Italy

The declines in new-car registrations in Italy and the UK in 2020, were 27.9% and 29.4% respectively. However, new-purchase incentives introduced in Italy and the end to Brexit uncertainty in the UK, which compounded the effects of COVID-19, will provide a positive impetus to demand in 2021.

Autovista Group’s latest base-case forecast predicts a 25% improvement in UK new-car registrations in 2021, to just over two million units. However, this is predicated upon vehicle deliveries being largely unimpaired by post-Brexit disruption after any short-term teething problems, and the car market being able to recover from the current lockdown, together with any further restrictions that may be imposed later in the year.

‘Import delays at the port of entry will reduce UK registrations in Q1 and Q2 2021 and manufacturers are still not producing cars at full capacity due to COVID-19. The UK is also in lockdown but click-and-collect will help some car registrations, with the November 2020 volumes highlighting the need retail customers still have to kick tyres,’ said Anthony Machin, head of content and product at Glass’s.

The recovery is not expected to be as pronounced in Italy, but the new incentives will certainly help to drive the recovery.

Fuelling France

The French new-car market contracted slightly less than Italy and the UK in 2020, by 25.5%. In addition to the COVID-19 effect, the market was impacted by tax changes that were introduced in March 2020 and especially penalise petrol cars. These negative influences should dissipate during 2021 but the reduction in incentives for electrically-chargeable vehicles (EV) and the threshold for the environmental ‘malus’ (penalty), along with a higher penalty ceiling, will suppress demand.

‘Despite a more favourable malus scheme for diesel cars on the new-car market, I do not expect a diesel sales increase in 2021 and I expect lower petrol sales. However, OEMs are pushing battery-electric vehicles (BEVs) on the new-car market for CO2 reasons and the number of plug-in hybrids (PHEVs) increased a lot in 2020, a rise that will continue in 2021. Hybrids also offer a real alternative to petrol cars as they are cheaper than PHEVs, the electricity usage is simpler and, in terms of taxation, they offer the same benefits,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

In a follow-up article, King will discuss Autovista Group’s predictions for used-car demand and residual values in Europe’s major markets in 2021.