Date: 3rd November, 2005
Rich Hungarians choose SUV instead of MPV
New car prices in Europe rose more quickly in the third quarter of 2005, reports the latest quarterly pricing survey by PricewaterhouseCoopers and eurocarprice.com. Average prices at the end of Q3 were 4.4% higher than a year ago (in Q2, the average annual rise was 3.9%).
European new car sales remained flat overall, growing just 0.2% compared to the previous 12 months. With the exception of the buoyant Lower Medium sector, sales fell in all segments. The largest drop in volume (-10.3%) was in the Mini segment, which also saw some of the largest price rises, averaging 6.0%.
"New model launches and facelifts over the past 12 months are driving strong increases in volumes and in turn prices are rising. Within the Mini segment the average price is around 3,000 euros lower than in the Small segment and margins are generally lower, so setting the right prices at the outset is essential. Additionally the production lifetime for a Mini segment model can be over 10 years, so it is essential to establish sustainable margins on new models." – said Armin Krug, the leader of the Automotive Industry Group at PricewaterhouseCoopers Hungary.
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 93% higher than the eurozone average. The least expensive in Quarter Three was Switzerland, at 10% below average.
Hungary Market Summary - Swing from Mini and Small segment cars to larger models
Average new car prices in Hungary are currently 5% below the European norm. After a period of significant price increases 18 months ago, there are signs of a renewed upward trend (currently +2.5% a year). Prices are increasing most in the Lower Medium segment, driven by new model introductions.
New car sales in Hungary have declined slightly over the last 24 months. Reductions in Mini and Small segment cars are being counterbalanced by a trend towards larger cars, albeit from very low levels of sales. Unlike most markets, MPV sales have not grown over the last 12 months in Hungary. Diesel models are gaining an increasing share of the market at the expense of petrol sales.
Other markets overview
The picture for the "big five" markets is mixed. Sales volumes rose slightly in Germany and France. Price increases in France and Germany were both in excess of 3% per annum. Volumes and prices moved up strongly in Spain. Sales in Italy are nearly 5% down year-on-year but Italy is also seeing the largest price increases in Europe. Prices in the UK are starting to increase more quickly despite a continued downturn in the market.
Scandinavia, Norway and Denmark experienced the largest market growth in Europe in Quarter Three. The market in Finland fell by over 4% compared to 12 months earlier. Retail prices in these countries, especially Denmark, are well above the European average due to exceptionally high levels of taxation.
Sales fell in Eastern Europe, particularly in Poland where the market is now down over 30% year-on-year. Price increases were also below average in these markets.
ENDS
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