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Switch to WLTP helps European new car market hit nine-year high

The European new car market continued its strong performance in July as registrations reached their highest monthly volume since July 2009, helped by the imminent switch to the Worldwide harmonized Light Vehicles Test Procedure (WLTP).

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A total of 1.31m cars were registered in July, a year on year increase of 10.0%

Figures from Jato Dynamics show a total of 1.31m cars were registered in July, a year-on-year increase of 10.0%.

The market was boosted by increased demand in Spain and France, as well as double-digit growth in midsize markets like the Netherlands, Austria and Poland. The results were also boosted by an extra selling day in the month compared to July 2017 and continued growth in SUV demand helped drive growth, with their volume up by 34% to 461,900 unit.

However, Jato said that the upcoming deadline to register cars under the existing NEDC emissions regulations may also have had an impact by accelerating the purchase process.

DfT derogation rules mean carmakers can only sell up to 2,000 (or 10% of 2017’s sales volume) pre-1 June build vehicles after September when the new WLTP cycle finally kicks in for all new cars. In turn, it’s raised concerns that large numbers of in-stock cars might not meet the new regulations, with potential to increase pre-registrations and bumper discounts as they are pushed through to market.

“The results from July are certainly positive and a clear sign that the market is recovering well, despite the current challenges it faces over diesel and CO2 regulations. Although these results are encouraging, part of the growth could potentially be explained by more consumers and dealers buying cars before the WLTP test process is extended to cover all new car registrations on 1st September. It will be interesting to see how the market performs in August, and whether this confirms the theory,” said Felipe Munoz, JATO’s global analyst.

In the UK, the switch to WLTP has created a number of issues as fleets and drivers wait to hear from many manufacturers about the NEDC Correlated CO2 figures for their cars while also awaiting guidance on future taxation for WLTP-tested cars, as HMRC looks to switch to new formats of VED and Company Car Tax for such cars from April 2020.

The issue has been highlighted in Fleet World’s campaign to save the company car, which launched just over a month ago, The campaign highlights how company cars are cleaner and safer than average cars while also providing a cost-effective tool for both businesses and drivers, but registrations are actually declining due to driver and operator concerns over issues including future WLTP taxation. As such, the campaign sets out a six-step action plan, including advance notice on future BiK taxation,  accompanied by a petition to help drive discussions at Government level.

 

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.