European Vehicle Registrations Show Some Life

European vehicle registrations rose 2% in December compared to November; year-over-year registrations are up by 4.5%. The three-month average in December is lower by 0.4% compared to where it was in November and the three-month average has a 12-month growth rate of 3.8% compared to the unadjusted rise of 4.5%.

The growth rate progression shows a 12-month growth rate of 4.5%, jumping up to a 19.5% annual rate over six months and falling back to a contraction of 4.8% at an annual rate over three months. However, the annualized growth rates calculated from three-month moving averages show a 12-month gain of 3.8%, a six-month gain of 8.1%, and the three-month gain of 10.8%. The 3-month smoothed data show that there is an ongoing acceleration in car registrations that is masked by volatility in the month-to-month numbers: the 10.8% growth rate over three months is quite a good sign if it can hold up and, of course, it's on the heels of 8.1% growth over six months.

Looking at the individual reporting countries Germany, France, Italy, Spain, and the United Kingdom, we see gains in registrations in December compared to November in three countries. In the U.K. registrations rise by 6.1% month-to-month, in Italy they rise by 4.2% month-to-month and in Germany they gain 1.8%; however, registrations fall on a month-to-month basis by 2.1% in Spain and by 1.5% in France.

The country level sequential growth rates show a mixed picture in Germany where registrations are up 10.6% over 12 months and accelerate to 19.5% over six months but are declining at a 16.8% annual rate over three months. In France registrations rise by 3.6% at an annual rate over three months; however, they are stronger over six months and they then are contracting over 12 months. In Italy registrations are up by 2.5% over 12 months, the growth rate jumps to 25.4% at an annual rate over six months, but then, over three-months, registrations fall at a 1.8% annual rate. Spain also shows erratic performance with the decline of 2.9% over 12 months, a gain over six months and then a decline at a 12.4% annual rate over three months. And the U.K. registrations trends are deteriorating with a 3.7% gain over 12 months, a 4.8% annual rate drop over six months, and then over three months the annual rate plunges to -30.8%.

The reporters in the table show registrations weaker than they were in January 2020 just before the COVID virus struck; overall registrations are lower by 12.2%. Registrations are down by 13.3% in Italy, down about 10% in Germany and France, down by 5.7% in Spain, while the U.K. registrations are lower at just 1.5%

The second table looks at rankings. We look at the rankings of registrations since 1995 and at the bottom of the table we have an overall ranking of growth rates for registrations compared to 1995. The pace of registrations in Europe is in the 25th percentile; the 3-month moving average ranked on the same period is slightly stronger, at a 31.4% ranking. Year-over-year growth rates show much higher rankings with European rankings at their 65.6 percentile and the three-month moving average at a 66.3 percentile ranking. These differences simply show us that the growth rate of registrations is relatively high even by historic experience; however, the absolute amount of car registrations that this represents is small by historic experience, below the historic median.

The ranking experience since January 2020 looks at what happened at since COVID struck. Current European registrations over this period are at their 70.8 percentile with the three-month average at its 81.9 percentile, showing that although the pace of registrations has progressed substantially compared to what it's been through most of the COVID period. However, when we compare these rankings to the longer time series, we see these are still relatively weak registrations in a broader historic perspective. Similarly, the growth rates of registrations since January 2020 are comparable to the growth rates of registrations over the longer period.

Over the COVID period, all of the reporting countries have ranking values of car registrations in December over the 50th percentile except for France.

On balance, this report shows us that there is some recovery underway for vehicle registrations in Europe. The current numbers are among the better numbers we have seen since COVID struck in 2020; however, they are still substantially weaker than the numbers we were used to seeing before COVID struck.