Car registrations in Europe Rebound Smartly in April

European car registrations in April rose 11.8% after falling by 8.8% in March. Looking at smoothed data with percent changes calculated from three-month moving averages, the April gain was 0.3% after a March gain of 0.5%. This simply means that in smooth terms gains in auto sales/registrations continue and haven't changed speeds by very much.

Accounting by country, it was a strong monthly gain in April in Germany with car registrations up to 8.4%; Italian registrations were up by 3.3% in April. Registrations fell by an outsized 8.8% in the United Kingdom; they fell by 1.8% in France, and by 0.5% in Spain. The country level data represent reversals month-to-month for all countries except the U.K. In other words, countries with sales gains in April had declines in March and countries with declines in April had increases in March. The exception is the U.K. that had substantial declines in both March and in April; however, the U.K. is also coming off of a huge gain in February that by itself is nearly as big as the two months consolidated drops in April and March; the U.K. February gain is by far a much larger than the increase in registrations seen in any other European country in the table in that month. The month-to-month declines for sales for two months running in the U.K. is not surprising; the U.K. economy has been struggling. However, when we see that those two months’ drops compared to such a strong gain in February the overall signal is muddied and muted.

Sequential annualized sales for all of Europe show 12-month gains at 13.9%, compared to a 4.2% annual rate gain over six months, and a 3.6% annual rate gain over three months. There's a sharp slowdown from the 12-month pace compared to three and six months. Surprisingly, there's more variability in the smooth data that show European registrations up 6.1% based on three-month averages over 12 months but a growth rate of -6.9% over 6 months based on smoothed data, and a growth rate of 6.1% over 3 months based on smoothed data.

Country level sequential data only show relative clarity for Italy and the United Kingdom. U.K. 12-month growth rate is 1.8% while the three-month and six-month growth rates are on the order of -20% annualized. Germany and Spain both show increases on all horizons. For Germany, the year over year growth rate is 12.9%, pretty similar to the three-month growth rate; however, there's a jump in the growth rate that doubles over six months and then settles back down. For Spain, the 12-month growth rate is 22.5%; it edges down slightly to 18.2% at an annual rate over six months and then jumps sharply to a 47.1% annual rate over three months. Germany and Spain clearly have the strongest registration profile. The U.K. clearly has the weakest while France and Italy are in between case; both France and Italy show gains over 12 months and declines in registrations over six months, but over three-months France shows an increase in registrations at a 19% annual rate while Italy shows a decline at a -14% pace. Italy shows a decelerating pace of registrations from 8.2% over 12 months to -13.2% over 6 months, the decline gains pace to -14.2% over 3 months.

We can also assess sales/registrations by looking at growth rates ranked historically as well as looking at the levels of sales that occur in each area ranked historically. For all of Europe, the pace of unit registrations is right at a 50.3 percentile ranking on data back to 2008. However, if we take the rankings on data back to 1995, we find the current standing is at 30.2% - much weaker. That indicates that in the longer period sales were much stronger in their early years than they are now.

Country level data show German registrations at a 48.1 percentile standing, France has a 30.3 percentile standing, Italy is at a 40.5 percentile standing, Spain is at the 17.8 percentile standing, and the U.K. at a much stronger 65.9 percentile standing on data back to 2008. All of these have higher standings than on data back to 1995. Since 2008 all the country level registrations are below their median levels from registrations since 2008 – except the U.K.

Ranking data on growth rates, however, produces a very different result. On data back to 2008, the growth rates for European registrations rank at 88.1% and growth rates calculated from three-month averages stand at the 72.4 percentile. Growth rates are even stronger if we compare and rank current growth back to 1995. The paradox here is that growth rates have gotten stronger in the 2008 period. To make up for the fact that the unit sales on registrations are lower, growth has been a bit stronger recently. This is why registrations on levels of data are stronger in the 2008 period than on data back to 1995. But rankings on growth rates have higher rankings when ranked over the longer 1995 period because growth rates were weaker back then.

On balance, European registrations data suggest that registrations are still moving ahead in most places. Italy and the United Kingdom are showing the most weakness while Germany, France, and Spain consistently show solid-to-strong growth rates for registrations over three and six months. These are reassuring results for Europe.