Following the release of the European Automobile Manufacturers’ Association’s (ACEA) EU car market figures for October;

David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his view:

“Growth recorded in October for the EU’s car market looks healthy at first glance. However, much of that growth reflects changes to the EU’s vehicle emission testing rules that distorted the market last year – so there is a base effect on the annual comparison.

“The real picture focuses around new car demand in Europe hitting a ceiling this year, with market growth staying flat on 2018’s level. Moreover, there are a number of headwinds at work for the region, which will make it likely that the market in 2020 will be flat or show a decline.

“In particular, Germany’s economy is being hit by lower exports of manufactured goods to a slowing Chinese economy whose prospects are still very much clouded by trade tensions with the US. Germany’s new car market this year is forecast by GlobalData to be flat on last year at around 3.4 million units.

“In addition, Brexit uncertainties are weighing on the UK car market this year with new car sales down 6.7% in October, the latest in eight months of decline. Next year is likely to see further uncertainty for the UK’s already fragile economic outlook, negatively impacting overall car demand again.

“Other major European national car markets are also far from strong, with consumer and business sentiment deteriorating in 2019.

“After several years of bumper new car markets in Europe, underlying demand in 2020 will be weakening and economic headwinds could send the market down – with adverse consequences for carmakers struggling to be profitable in the region.”