SUV gains fail to offset overall H1 decline of European market

European consumers' persistent appetite for SUVs and crossovers was no longer enough to lift the overall European market. In the first half, SUV/crossover sales increased by 5.9 percent to slightly more than 3 million units, boosting their market share to a new high of 36.1 percent, up from 33.2 percent during the same period last year.

Although 171,569 more SUVs and crossovers were sold from January to June, the surge failed to overcome a combined loss by sedans, station wagons, coupes, convertibles and minivans of 389,044 units, down 6.7 percent to 5.42 million units compared with the first half of 2018.

The end result is that the overall market declined by 2.5 percent to 8.48 million in the half, according to figures from market researcher JATO Dynamics.

An analysis of the SUV/crossover sales data shows that just three segments -- premium compact, small and compact SUVs -- grew while demand for larger SUVs from non-premium brands declined 30 percent, resulting in a segment that has nearly gone extinct with a mere 5,423 sales in the half (see table, above).   

Demand for SUVs and crossovers also continued to push Europe's minivan sales to the brink. Demand for small minivans fell 38 percent while compact minivan sales decreased by 33 percent (see table, below).

"There's no demand for minivans anymore. Everybody wants SUVs and crossovers," Kia Europe COO Emilio Herrera told Automotive News Europe, while also confirming the South Korean automaker would stop selling the Venga and Carens minivans.

It will be another hard hit to the body style because the Venga ranked No. 3 in the small minivan segment while the Carens finished the half at No. 9 in the compact minivan segment.

European buyers are also walking away from mass-market niche models such as coupes and convertibles. ANE noticed this trend years ago and decided to combine the volume coupe and convertible niches into a single segment.

Premium brands had avoided the slowdown in their niche derivatives until this year. In the first half premium coupes lost a third of their volume and convertibles declined by 12 percent.

Price does not appear to be the core reason for the reduced appetite for premium coupes and convertibles. Europe's exotic segment, which includes even more expensive coupes and convertibles, was the second-best performer percentage wise during the half, with sales up by 52 percent to 10,436 units (see table, below, left).

The recently launched BMW 8 series jumped to the top of the segment, taking a comfortable lead over the new Bentley Continental GT.

These two models are performing at a different level compared with the rest of their competitors as they combined to account for more than 40 percent of all exotic car sales during the half.

The segment that gained the most percentage wise during the half was electric cars, led by strong demand for the Tesla Model 3.

The Model 3's performance also shook up the midsize premium segment as it ranked fourth behind the Mercedes-Benz C class, Audi A4 and BMW 3 series but it was ahead of the new-generation Volvo V60 station wagon.

Because of the steady rise in demand for full-electric models, ANE has decided to include those vehicles in both the electric sector as well as in the segments where they best fit. This is being done to make it easier to track how well the models are performing in the overall market. The models are noted in bold in the three-page first-half 2019 segment tables, which are available in PDF format below.
 

The Tesla Model S, which finished 2018 as the best-selling upper premium model in Europe, slipped to No. 5 in the segment during the half.

Other battery-powered models that cracked the top 10 in the 25 segments that ANE tracks are the Kia Soul EV (small minivan), Nissan e-NV200 (compact minivan), Mercedes Vito (large minivan), Smart ForTwo Electric Drive (coupe & convertible) and BMW i3 (compact premium).