'Unprecedented' fall in EU car market as COVID-19 sparks biggest decline on record

The COVID-19 pandemic has sparked the biggest decline in car production in Europe on record, data published on Tuesday showed.

The European Automobile Manufacturers Association (ACAE) said new car registrations across the European Union fell by 23.7% in 2020, the biggest year-on-year decline since the organisation began collecting data. 3 million fewer cars rolled off lots last year when compared to 2019, with just 9.9m registrations last year across the 27 country bloc.

The ACAE blamed the COVID-19 pandemic, which disrupted car assembly lines and dented demand.

“Containment measures – including full-scale lockdowns and other restrictions throughout the year – had an unprecedented impact on car sales across the European Union,” ACAE said.

Spain suffered the biggest slump across the EU, with new car registrations falling by a third. Italy and France saw registrations fall by around a quarter.

Losses were uneven across 2020 and, unsurprisingly, the biggest fall in registration came in the teeth of the first wave of the COVID-19 pandemic. Registrations dropped by 76.3% across the EU in April last year, a month when most countries were in lockdown.

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The car market has been recovering since its low point in the spring and ACEA said car sales were down just 3.3% in December. The headline figure masked contrasting fortunes in local markets — sales were down over 10% in France and Italy, but rose 9.9% in Germany.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said December’s headline figure was slightly weaker than expected.

“This leaves a low base for a rebound this year, though the reality of sustained restrictions in Q1, and perhaps even into Q2 as well, suggests that the initial pace of the recovery will be slow,” he said.

Europe’s car industry represents 7% of EU GDP and employs almost 15m people both directly and indirectly, according to ACEA.

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