Economy in Brief

Car registrations in Europe are plunging and they're plunging pretty much everywhere where the data are being reported. One of the reasons for this is the sudden lack of popularity in electric vehicles, whose purchase demand has declined precipitously.

Country level data show that declines in registrations in August range from a month-to-month decline of 11.8% in Germany, to declines of 2.6% each in France and the United Kingdom. Germany, France, Italy, and Spain show substantial month-to-month declines in August and in July. Only the U.K. is an exception to this two-month losing streak; the U.K. 2.6% decline in registrations in August comes after a 3.9% increase in registrations in July.

Year-over-year total European registrations are down by 20.6%; smoothing this to look at declines over a three-month average reduces the drop to 6.6%; however, whether we look at raw declines or smoothed declines, the declines are generally getting bigger over shorter periods. The smooth declines, for example, moved from a 6.6% decline over 12 months to a 9.9% annualized decline over six months to a 10.9% annual rate of decline over three months. The annualized rate of decline is growing. The raw number for the year-over-year decline is a drop of 20.6% over 12 months, over six months that decline pace accelerates to 28.1% annualized, although there is a slight pullback showing a decline of 24.4% over three months; it's still a greater pace of decline than over 12 months.

The country level data show us that year-over-year declines range from exceptionally weak numbers like -27.6% in Germany and -21.1% in France, to more modest declines like -2.1% in the U.K. and -5.9% in Spain. However, all five reporting countries show year-over-year declines and of course the aggregate numbers presented are dismal.

If we compare what's going on with registrations now to the level of registrations before COVID struck, we're looking at double-digit declines. Raw net decline calculations round to double-digit declines for all five countries. The biggest shortfall from January 2020 levels is the U.K. that is 25.5% lower; however, Germany is also 23% lower, Italian registrations are about 21% lower, registration in France are 14% lower, while in Spain registrations are 9.5% lower.