Incentives Boost September European Car Sales by 4.4%

15 October 2003

September new-car registrations rose to 1.36 million in Western Europe, up 4.4% year-on-year from 1.31 million, reports the Association of European Auto Manufacturers.

But this sales buoyancy came at a price – a marked erosion of profit margins by vigorous discounting and zero-interest finance offers.

For the third quarter as a whole, the news was less good. Although sales for the period rose 1%, this failed to compensate for a weak first half and the overall figure for the first nine months declined by 1.5% against Q1-3 last year.

On a cost-per-car basis, incentives in Western Europe average around €2,000 ($2,343; £1,399), analysts estimate – eyewatering but still only around half the present level stateside.

But in common with the USA, the European market is falling to Asian carmakers. Toyota increased its September car sales 9.8% in Western Europe, grabbing 5% market share compared with 4.7% a year ago. Overall, Japanese and Korean car makers controlled 17% of the Western European market during September, up from 16% a year earlier.

But despite this oriental erosion, September sales at Volkswagen, which sells more cars in Europe than any other company, rose 3.1%, even though the company's new Golf model hasn't yet hit the showrooms.

Another European giant, Renault of France, saw its sales leap 16% year-on-year for September, but that was mainly due to weak comparative numbers in 2002, according to analysts.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff