New Car Sales In Free Fall In UK And Europe Thanks To WLTP Fuel Economy Standard
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People hated the old NEDC fuel economy standard used throughout Europe and the UK for the past several years. It was related to real world driving about as much as a fish is related to a bicycle (with apologies to Gloria Steinem). So the powers that be decided to create a more realistic standard known as the Worldwide harmonized Light vehicle Test Procedure or WLTP for short. All new cars sold in the European Union and the UK must be certified using the WLTP standard as of September 1 with very limited exceptions.
So what happened? Manufactures dumped boat loads of new cars that weren’t WLTP certified on the market in August. Thanks to generous incentives, new car sales rose substantially — about 23% — that month. But now the party is over and the industry is waking up to find buyers are staying away from dealer showrooms in droves. New car sales in the UK were down 21% in September according to Automotive News Europe.
Not every brand took the same hit. Volkswagen and Audi sales were off by more than 50%, while Jaguar was up 19%. Ford was down 16% while Toyota barely felt its drop off of 0.6%. For the year, new car sales in the UK are off 7.5%.
The news is even worse in Germany, where new car sales were off 31% in September after being up 25% in August. Volkswagen took the biggest hit since half of its present models are not WLTP certified. Porsche sales were down a whopping 76%, with Volkswagen-branded cars off 62%. Honda also saw a big dip at 59%. Mercedes sales were off 21% while BMW shrugged off the bad news best of all manufacturers — down a barely noticeable 1.2%. For the year, new car sales in Germany are up 2.4%.
Conditions in Italy are indicative of another trend affecting the European — sales of diesel-powered cars are off noticeably from what they were prior to the Volkswagen cheating scandal. The oil burners suffered a 38% decline as a group versus only 6% for gas powered cars. Hybrid car registrations were up 28%.
In September, FIAT sales fell 43% while Alfa Romeo suffered a 63% decline. Kia has been one of the few bright spots in Europe and the UK. Its sales are actually showing healthy year over year gains — one of the few companies that can make that claim.
The WLTP hangover is likely to weigh on new cars sales for a few months more until manufacturers can fill the pipeline with more cars that comply with the WLTP standard. In the meantime, shoppers are forced to confront the fact that the mileage claims they were used to were illusory. That may make hybrids, plug-in hybrids, and electric cars more appealing. There’s nothing like a dose of reality to take the shine off that new diesel or gas powered car and increase the allure of the alternatives to four-wheeled carbon bombs.
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