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Thursday, 2 January 2014

The 2013 car sales have been very poor in The Netherlands. Record sales in December 2013 predict doom and gloom for car sales in 2014Q1.

Today, the Dutch association for the automotive industry ‘RAI’ presented the car sales for The Netherlands in 2013.

To state that the sales data were not particularly well, would be a gross understatement.

Sales dropped by a staggering 17% to 417,036 cars from 502,496 cars in 2012, in spite of all-time record sales in December.

Here are the pertinent snips from the press statement by the RAI:

In 2013, 417,036 new cars were registered in The Netherlands. This is 17% less than in 2012. Still, especially in 2013Q4, an exceptionally high number of cars was registered, under the influence of changing taxing rules, taking effect on January 1st, 2014.

During the first three quarters of 2013, car sales showed a drop of approximately 30% year on year. The already forecasted final sprint in Q4 offered some solace with respect to sales numbers. In October and November 2013, the year on year sales showed growth figures of respectively 37% and 34%. December 2013 will be booked as the best December month ever, with 39,163 registered new cars (a year on year rise of 115%).

On 1 January 2014, the CO2 exhaust thresholds, as a foundation for fiscal levies on cars, have been invigorated. Besides that, the percentages in additional taxes for electric cars and most plug-in hybrids have been raised. 
And last but not least, a number of tax breaks for entrepreneurs have been retrenched. 

All these measures led to an end-of-year surge in demand for cars that offered only 0% and 14% of additional taxes on the netprice, for the private usage of corporate drivers.

The RAI expects to sell only 400,000 new cars in 2014, unless the consumer confidence gets a boost upwards and the Dutch decide to buy more durable goods again.

The five best sold brands in 2013 were:
  1. Volkswagen (49,985 stuks, market share: 12%);
  2. Renault (37.184 / 8,9%);
  3. Ford (31.813 / 7,6%);
  4. Peugeot (30.242 / 7,3%);
  5. Toyota (28.789 / 6,9%).
Fortunately, the RAI offered the source data for the Dutch car sales. These data – which I  summarized in a few charts – show that there are a number of severe losers, but also a few winners. 

Tesla was the glorious winner in the y-o-y growth percentage: the latter is not very surprising for a brandnew car brand, that on top of that specializes in electric cars.

Car brands with the biggest y-o-y sales drop in 2013
Chart by: Ernst's Economy
Data courtesy of: RAI,
Click to enlarge
Car brands with positive y-o-y sales  in 2013
Chart by: Ernst's Economy
Data courtesy of: RAI,
Click to enlarge
Biggest winners and losers in y-o-y numbers in 2013
Chart by: Ernst's Economy
Data courtesy of: RAI,
Click to enlarge
The winners of 2013

Apart from the new brand Tesla and the low budget brand Dacia (owned by Renault), especially Volvo and the glorious return of ‘dead-man-walking’ brand Mitsubishi made a big impression.

Volvo’s V40 was among the five best sold models in The Netherlands, while Mitsubishi earned the moniker ‘Comeback Kid’, due to its impressively selling models Space Star (2,512 in 2013 ) and especially the Outlander (available in a Plug-in Hybrid version): 8,726 in 2013 from only 1,024 in 2012.

With 4,988 cars sold in December alone, The Outlander was by far the best sold model in that month. It took care of 12.75% of the whole Dutch car sales, followed by Volvo’s V60 (a.o. Plug In-hybrid) and V40 (new model) with respectively 2,158 and 2,082 numbers sold in December.

The losers of 2013

When you look at the biggest losers of 2013 on the chart, four giant car conglomerates and one Korean brand pop out:

The biggest losers of 2013
Chart by: Ernst's Economy
Data courtesy of: RAI,
Click to enlarge
The Volkswagen Group and General Motors (GM) are the biggest losers in sheer numbers. However, the pro rata loss for the Volkswagen Group is not among the highest of 2013, due to its massive sales numbers of still over 90,000 cars in that year.

The grapes were sour for General Motors: the massive blow struck upon Opel and especially the 75%+ sales decrease for Chevrolet was reason for GM to withdraw the brand Chevrolet (i.e. Daewoo) from the Dutch car market and to fully focus on the brand Opel.

What all these ‘losing’ brands have in common, however, is that the conglomerates behind it failed to step in at the trend for environmentally friendly cars in time. The fiscal pressure from the Dutch government on not-environmentally friendly cars and especially the very favourable tax-breaks for electric cars and plug in-hybrids have radically changed the automotive landscape in 2013.

Nevertheless, those tax-breaks have now largely ended with the deployment of much less favourable regulations on January 1st, 2014. This is the reason that 2013’s winners could easily become 2014’s losers after all: anybody, who thinks that most car-buyers will buy a plug-in hybrid or electrical car for fun, is totally out of his mind. Consequently, expect totally different numbers at the end of 2014.

And there is more: as Q4 of 2013 showed (see first red and bold paragraph) with its ridiculous year-on-year sales growth of respectively 37% (October), 34% (November) and 115% (December), people and Small and Medium Enterprise (SME) companies have been ‘hoarding’ cars in the end of 2013.

As I already explained in my Outlook for 2014:

It is my firm opinion that people, whose job could be on the line (category 2), will remain consuming cautiously with respect to expensive products and services.

Especially the purchases of new cars by this group have often been carried forward to 2013, in order to yet profit from (ending) tax breaks on environmentally friendly cars. This will have a definite impact on car sales in the first months of 2014.

In plain English: in my opinion, the demand for new cars will be close to nought during the first months of 2014! 

This will probably cause havoc among the car producers and car dealers. Especially among the latter, as most car dealers are already clinging on to life by the skin of their teeth. With that taken into consideration, I consider the forecasted car sales for 2014 of 400,000 items to be hopelessly optimistical.

And please don’t count on an improving consumer confidence in The Netherlands, in order to make 2014 a good year for the automotive industry after all (see second red and bold paragraph): it just won’t happen!


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  2. I was shocked at first to see the predictions about poor car sales, then it made me think about the housing market that seems to go through ups and downs every few years. The auto industry must be in one of those lulls as the housing market has just now taken an upturn, I think the car market will be right behind.