VW, Toyota help Europe sales grow by 17% in November

Europe's new-car market showed double-digit growth in November, helped by higher registrations in Germany and the UK, and increased demand for Volkswagen and Toyota cars.

Passenger car sales rose by 17 percent to 1.01 million during the month in the EU, EFTA and UK markets, data from industry association ACEA showed on Thursday.

In Germany, sales increased by 31 percent. In the UK registrations were up 24 percent. In Italy, the market was up 15 percent.

VW Group and Toyota were among the month's big winners, while Stellantis and Hyundai Group saw sales drop.

Registrations at VW Group, the region's No. 1 automaker, rose by 37 percent, with Audi's sales up 60 percent and VW brand up 44 percent. VW brand's sales were helped by strong demand for its Golf and Tiguan models.

No. 2 Stellantis saw its registrations decline by 3.7 percent. Citroen was down 13 percent, Opel down 5.9 percent and Peugeot down 5.7 percent. They were the group's worst performers. Stellantis's deliveries have been hit by logistics problems.

No. 3 Hyundai Group' sales fell 3 percent, with Hyundai brand down 7 percent and Kia up 2 percent.

Renault Group, Europe's No. 4 by unit sales, saw registrations rise 4.3 percent, with Renault down 3.8 percent and Dacia up 16 percent.

Toyota Group's sales rose by 35 percent, with the Toyota brand up 35 percent and Lexus up 43 percent.

Toyota is benefiting from the popularity of its new Yaris Cross small crossover.

The November rise in registrations was the fourth month of sales increases as supply-chain issues continued to ease. However, through November sales are down 5.8 percent to 10.19 million from the first 11 months of last year.

Deliveries have improved as shortages of semiconductors and other components eased, though a worsening economic outlook threatens to hurt demand in the coming months.

Order books have remained full, which should help earnings through early 2023. But the industry has yet to recover to pre-pandemic levels and probably will not be able to avoid a third consecutive year of decline, according to Bloomberg Intelligence.

Analysts at LMC Automotive expect high rates of inflation, declining consumer confidence and stretched household budgets to hit demand in the coming months. "We assume 2023 will comfortably outpace 2022, though we are a little more cautious," the analysts said, trimming their sales forecast for Western Europe to below 11 million.

Some manufacturers are already raising alarm bells about the impact of spiraling inflation. VW flagged this week that electric-vehicle sales in Europe had "gone off track" in recent months as surging energy prices started hurting demand.

High-end luxury vehicles have been relatively resilient this year, and automakers are still benefiting from unfilled orders accumulated during the height of their supply-chain crises.

Kepler Cheuvreux expects an overall 5.3 percent drop in western European registrations for 2022, including a 15 percent decline for light commercial vehicles, which are typically more sensitive to macroeconomic deceleration. Registrations are likely to remain well below pre-pandemic levels next year, Kepler analysts wrote in a Dec. 13 note.

Bloomberg contributed to this report