Date: February 2, 2006
Sales of new diesel cars in Europe continue to rise as consumers switch from less expensive petrol cars in search of fuel cost savings. The latest quarterly pricing survey by PricewaterhouseCoopers and eurocarprice.com shows that diesels accounted for 49% of the total European car market at the end of 2005. Diesel is now set to overtake petrol as the primary fuel for new passenger vehicles in Europe during 2006.
Prices for diesel cars continued to rise more quickly (by 3.5% a year) compared with those for petrol cars (3.2%) in the final quarter of 2005, although the overall rate of price increases slowed as sales weakened. New car sales fell in 13 out of the 19 countries covered by the PricewaterhouseCoopers survey. Overall, average prices at the end of 2005 were 3.4% higher than a year ago (in Q3 the average annual rise was 4.4%), while the total market was down by 0.6%.
Charles Seguin, Leader, Retailer Capabilities Division, PricewaterhouseCoopers, said:
“Although diesel car sales will undoubtedly outstrip those of petrol in the coming year, the debate continues on the ultimate level of penetration they will achieve. They could potentially achieve 55-60% of the total market but the extra costs of making diesels to meet tougher emissions requirements means buyers will still have to pay a premium over petrol versions. Fuel prices will be another factor. Demand for diesel models tends to be higher in markets where there is the largest price difference between petrol and diesel. Varying levels of diesel fuel taxation between countries will always be a constraint.”
According to the PricewaterhouseCoopers European New Car Price Index – a unique volume-weighted measure of relative new car prices - the most expensive car market in Europe is Denmark where new car prices are 91% higher than the eurozone average. The least expensive is Switzerland, where new car prices in the last quarter of 2005 were 8% below the eurozone average.
Local market summary - Weak new car market in Hungary puts brake on price increases
Hungary's new car market fell by 1.4% compared to the same period 12 months earlier, and average price increases were much lower than the European average - at an annual rate of just 0.7%. The largest price increases were in the Mini (3.6%) and Executive (1.8%) segments. Prices for petrol models increased by (0.5%) while prices for diesel increased by 1.3%.
Overall, the average price of a new car in Hungary is 5% lower than in the euro currency zone.
Although the market declined, diesels significantly increased their share of new sales. Diesel car registrations rose by 29% while those of petrol cars fell by 6%. Diesels now account for 17% of the new car market in Hungary. Poor performances in the main volume segments contributed to the overall decline in the market although the Executive and Upper Medium segments achieved significant growth.
Other markets overview
Market performances across Europe as a whole remained varied. In the other big five markets, sales volumes improved slightly in Germany, Spain and France, where price increases were below the European average. For the second quarter in succession, Italy recorded the largest increase in new car prices of any European market but sales continued to decline. New car prices in the UK rose slightly faster than the European average but the total market dipped more than 4% below the previous year.
In Scandinavia, the recent growth in sales was reversed. While Denmark again saw the largest market growth in Europe, sales fell in Norway, Sweden and Finland. Retail prices in Denmark, Finland and Norway are well above the European average. Price increases in Denmark are now very low.
In Eastern Europe sales continue to be poor, particularly in Poland where the market is still down over 30% year on year. Poland is also the only market where average prices are dropping. Price increases in Czech Republic and Hungary were lower than 1% a year.
ENDS
Notes to Editor
The European New Car Price Index provides comprehensive analysis of movements in retail car prices and sales volume in 19 European car markets. The index compares average car prices in each market with the average price in the euro currency area (index 100). It also analyses 400 models in each market by fuel type, segment and body style to track trends in price and volume movements, using data supplied by ROADTODATA and Polk Automotive.
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