• ‘Scrappage hangover’ begins in Europe

• German new car market falls by almost one third (29.8%)

• Volkswagen Golf suffers, with 4.0% sales drop, vs. February 2009

• Uncertainty for post-scrappage sales in UK, Italy, Spain and France

Dramatic evidence of the shifting fortunes of the car industry is revealed in latest figures from the world’s leading provider of automotive data and intelligence, JATO Dynamics, which show the effects on brands and European sales figures, of declining new car demand in Germany.

What was once Europe’s largest new car market is suffering a distinct ‘scrappage hangover’, with February sales down almost one third (29.8%), versus the same period in 2009. Last month, it was outsold again by Italy, which is still operating a scrappage incentive scheme worth EUR 1,500 – 5,000, for every 10 year old car traded for a new, low emissions model.

One of the biggest casualties of this drop in demand was the Volkswagen Golf, whose lead over Ford’s Fiesta was cut to 4,737 sales (February 2009: 9,764 sales). Overall, Golf sales were down 4.0% across Europe last month, mainly due to a 9.4% drop in Germany; its largest market, responsible for approximately almost half of its European sales (February 2010: 45.2%).

David Di Girolamo, Head of JATO Consult, said of the figures: “This is the true picture of consumer confidence in the German market, after a series of smaller monthly declines. If this situation were to affect all markets at the end of their scrappage schemes, we could lose a third of all European new car registrations by mid-2010.”

The UK scrappage scheme extension expires at the end of March, while schemes will be phased out in Spain, Italy and France through 2010.

The continued buoyant sales in these markets ensured overall European sales remained positive in February, versus 2009 (Spain up 47.2%, UK up 26.4%, Italy up 20.5% and France up 18.7%).

Model Performance

Volkswagen’s Golf continues to dominate the sales charts but its reliance on German car buyers puts this position in doubt for the first time in over a year.

Fiesta, which is much stronger in UK, Spain and Italy, has benefitted and more than halved the sales gap, compared with February 2009. These two remain clear of other top sellers, but the Renault Clio, Fiat Punto and Volkswagen Polo all posted double-digit sales gains.

Opel/Vauxhall’s new Astra is off to a strong start, edging the Ford Focus out of the European top ten.

Top 10 Models

Brand Performance

February saw scrappage-influenced small car sales continue to determine brand performances, with Renault a particular beneficiary, from the impressive sales of its Clio.

Opel/Vauxhall, Toyota and Audi were further casualties of the declining German market, which damaged their overall sales performances.

Top 10 Brands

National Trends

This month has seen Italy once again claim the title of “Europe’s biggest new car market”. Dominated by Fiat and with an enduring appetite for small cars, it was the only market in Europe selling over 200,000 cars last month and is up 25.2% YtD, compared to the same period in 2009.

Spain saw February 2010 sales rise by 47.2%; impressive growth which points to a recovery from its 2008 registration crash. Major beneficiaries are Ford Fiesta, Nissan Qashqai, Hyundai i30 and Opel Astra and Corsa.

The UK is another strong performer, up 28.7% YtD, but is also a market dependent on scrappage incentives, which has accounted for more than 320,000 sales since its introduction* and for one in five registrations in the month of February 2010, according to the national industry body, SMMT.

Beyond the problems in Germany, there continues to be a dividing line between scrappage-cushioned Western markets and a Central and Eastern European region bereft of such incentive schemes.

Concludes Di Girolamo: “The overall picture is still far from positive. The declines appear to be less severe in Central and Eastern Europe, which is more to do with the comparison period than any improving fortunes there. In February 2009, we were already seeing recessionary effects that continue today. The underlying figures from Western Europe are no more encouraging once you remove the impact of government incentives, as the evidence from Germany shows.”

Sales by Market

*Denotes estimated data for February 2010

The above data is provided by JATO Consult, the company’s bespoke consulting service which offers customers access to its unique data and provides solutions and advice to meet a wide range of automotive business challenges. For more information visit www.jato.com, or email consult@jato.com.

Editorial note: JATO Dynamics background

JATO was founded in 1984 and provides the world’s most timely, accurate and up-to-date information on vehicle specifications and pricing, sales and registrations, news and incentives. The company has representation in over 43 countries, providing unique local market expertise. The JATO client base includes all of the world’s volume vehicle manufacturers, giving them the ability to react to short-term market movements, plan for long-term developments and ultimately to meet consumers’ needs. JATO’s data has also been adapted for consumer use in motoring web portals where customers can see the advantages and disadvantages of a specified model against any other while major leasing companies use JATO data to drive the vehicle quotation process. Visit JATO at www.jato.com.

* = SMMT data 09.03.10: 324,991 new cars were registered through the UK scrappage scheme by the end of February 2010.