Wow. The crisis is over? Consumers in the EU have structurally regained the desire to buy new cars? The ECB’s policy is finally taking effect, and the “European Michel” is no longer saving money at zero interest rates, but rather consuming its money like mad. No, that is not the case. Anyone surfing through the German press landscape today might see headlines like “Boom on the car market” or “Record car registrations”. Statistically speaking, that may be true, but this boom was artificially created.
But from the beginning. As the European Automobile Association ACEA reported today, car registrations in December 2019 increased by 21.7% compared to December 2018. From 998,791 to 1,215,076 cars. Wow, that’s an incredibly good figure, you might say. This is the highest December figure ever! But ACEA also writes in its comments where this fantastic growth comes from. For example, December 2018 was a very weak month in which car registrations fell by 8.4%. So this month is a very low starting point for today’s publication.
France, Sweden and Netherland with tax effects
But that’s not even the most important thing. What is even more interesting is that car registrations are so good in December because, for example, France and Sweden (increases of 27.7% and 109.3% respectively) have made significant changes in their CO2-based taxation which will take effect from 2020. So buy a car quickly in December 2019 and enjoy the old tax advantages! And in the Netherlands (car registrations +113.9%), the government has decided to increase taxes for e-car buyers from companies from 4% to 8% from January 2020. So the Dutch companies that want to buy e-cars have quickly put their purchases into December 2019 to benefit from the lower tax rate.
This also means that what now looks like super great growth figures could/should/might look much weaker from January onwards, because these distorting year-end effects will no longer apply from January onwards. Car sales that are carried out ahead in December should then be absent in the next few months. So as a positive-thinking observer, we cannot buy anything from these current mega growth rates.