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One in four sales SUVs as European car market booms

PUBLISHED: 15:59 24 January 2017

Volkswagen Golf was best-selling car in Europe again last year.

Volkswagen Golf was best-selling car in Europe again last year.

Volkswagen

One in four new cars sold in Europe last year was a sport utility vehicle as the car industry boomed with registrations totalling 15.14 million.

With the European new car market 6.5% up on 2015, last year was the second highest volume seen since 2007 when total registrations topped 16 million, demonstrating that the market is proving resilient in the face of the geopolitical events of 2016 which have rocked consumer confidence.

The results show that the continuing SUV boom was the overwhelming trend of the year, with registrations growing by 21.4% – increasing from 3.2 million units registered in 2015 to 3.9 million last year.

In contrast, the traditional segments grew by just 2.2%. In fact, European consumer preferences shifted further towards SUVs, and away from hatchbacks, saloonss, estates and multi-purpose vehicles.

SUVs accounted for more than a quarter of total registrations at 25.6%, an increase in market share of 3.1% compared to 2015. In contrast, MPVs lost 0.9%, with its market share falling to 9.5%, while subcompacts lost 0.8% and accounted for 21.2% of the market.

In a show of resilience, Volkswagen Group maintained its lead of the market, and despite 2016 being one of its most challenging years ever – the German car-maker still managed to increase its registrations by 3.3%.

The overall market grew by 6.5%, meaning that Volkswagen Group’s market share fell from 24.8% in 2015 to 24% last year. This was the highest market share decrease of all car groups. In contrast, FCA (Fiat Chrysler Automobiles), Daimler, Renault-Nissan and Tata Group all increased their market share, thanks to their wider SUV ranges and the increase in sales seen in southern European markets. As other manufacturers gain ground, Volkswagen Group will need to work hard to maintain its position as Europe’s leading manufacturer.

Felipe Munoz, global automotive analyst of automotive business intelligence supplier JATO, said: “2016 was a great year for the industry, with the second highest volume of registrations since 2007. European car registrations have shown good momentum, with 27 out of 29 markets in Europe recording positive growth last year, and 14 of those markets posting double-digit increases. I believe car makers are now better prepared to face the challenging times ahead.”

Only the Netherlands and Switzerland saw their new car market shrink by 14.9% and 2.1% respectively while Croatia was up 23.4% and Hungary 24.9%.

Regarding the performance of brands in 2016, he said: “The challenges seen by VW benefitted mainstream brands such as Renault and Fiat. The premium brands also performed very well, increasing their market share by almost 1% from 23% in 2015 to 23.8% last year.”

Volkswagen’s Golf maintained its lead but lost ground in the model ranking. The Opel/Vauxhall Astra, Renault Captur, Fiat Panda, Volkswagen Tiguan and Peugeot 2008 also performed well. The highest market share gains were posted by the Hyundai Tucson, Renault Kadjar and Fiat Tipo.

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