JLR, FCA, Daimler rise
At group level, for the second-consecutive year Jaguar Land Rover outgrew all rivals. The luxury carmaker increased sales by nearly a quarter to 221,758 units in 2016. In the last two years JLR has boosted sales 53 percent compared with the 144,442 units it sold in 2014.
Jaguar accounted for 28,000 of JLR's 41,000-unit sales increase last year. The biggest contributors where the new F-Pace midsize SUV and XE midsize sedan.
Fiat Chrysler Automobiles came in second as sales climbed 14 percent to 992,712 units. Alfa contributed a mere 10,000 units to FCA's 123,000-unit growth, as most of the group's increase last year came from the Fiat brand (90,000) and Jeep (16,000).
Helped by the Mercedes-Benz brand and the continued growth of small-car unit Smart, Daimler was third in year-on-year sales growth by a group. The German company's sales were up by 13 percent to 945,074 units last year.
In the overall group ranking, VW kept its commanding lead with full-year sales of 3.64 million vehicles, but just two brands, Audi and Skoda, grew at a faster pace than the overall market. As a result, VW Group's share slid to 24.1 percent from 24.8 percent in 2015 and from 25.5 percent in 2014, when Europe's largest automaker was accounting for one out of every four sales in the region.
Renault-Nissan remained Europe's second-largest automotive group with a volume of 1.65 million units and a share of nearly 11 percent. PSA kept its No. 3-position with a volume of about 1.5 million sales, but it was the only automotive group in Europe that had a sales decline. PSA CEO Carlos Tavares has said that his goal is to protect profitably ahead of increasing unit sales. Volume was down by 0.5 percent but in a market that grew 6.5 percent, this translated into a share decline to 9.7 percent from 10.4 percent in 2015. This widened the sales gap between the French groups as Renault-Nissan last year outsold PSA by almost 180,000 vehicles, up from more than 51,000 in 2015.
900,000 below peak
Although European sales rose by nearly 930,000 last year, the region's 2016 volume remained almost 900,000 sales below the 16 million total reached during the market's peak in 2007. In effect, the 2016 increase preserves the existence of six vehicle assembly plants each with capacity to produce 150,000 units a year.
One of the key indicators of an automaker's success is its ability to keep its plants at or near production capacity. A factory needs to produce at 75 percent to 80 percent capacity to break even, according to industry experts. If the manufacturer's entire network of plants is producing below that number, it is nearly impossible for the company to make a profit. Ford, Opel, Volvo and PSA/Peugeot-Citroen closed car plants during Europe's six-year sales slump (2008-2013), but analysts estimate that the region still has about 20 percent more production capacity than is needed to satisfy customer demand.
Dissecting the numbers
A closer look at full-year European sales figures provides some additional insights.
- Along with reclaiming the title of world's top-selling premium carmaker last year, Mercedes returned to being Europe's No. 1 in that category. With a volume of 839,779, Mercedes finished ahead of former No. 1 Audi, which sold 830,956 vehicles in Europe last year, and BMW (821,525). The gap separating the top-selling premium automaker in Europe from No. 3 narrowed to just 18,000 units from 29,000 in 2015.
- The three German premium brands continue to be Nos. 6, 7 and 8 in the overall ranking ahead of volume brands such as Fiat, Skoda, Toyota, Nissan and Citroen.
- The gap between the German premium brands and their closest luxury rival – Volvo – widened to more than 530,000 sales from a 450,000 in 2015.
- Toyota increased its lead over Nissan in the race to be Europe's No. 1 selling Asian brand to almost 56,000 units from a tight 9,000 in 2015. Toyota's margin last year was similar to the 50,197 advantage it had in 2014.