22 February 2008

More than half of new passenger cars registered in the European Union are powered by the diesel engine, according to a recent Economic Report by ACEA (European Automobile Manufacturers Association). Diesel powered cars accounted for 53.3% of total new car registrations in the EU in 2007.

The automobile production in Europe increased by 5.3% in 2007, compared to 2006, says the report. Passenger cars accounted for 87% of the production, an increase of 5.5%. A particularly solid growth of 15% was noted in the truck sector. The production of light commercial vehicles increased by 2%, whereas the production of buses declined by 24%. New EU member states posted a 25.2% growth in automotive production and accounted for 15% of total EU motor vehicle production and 17% of passenger car production by the end of 2007.

Demand for new vehicles in Europe increased by 1.8% in 2007 mainly due to mounting new passenger car registrations in the new member states and a continuous boom on the European commercial vehicle market. Nearly 16 million new cars were registered, 92% of which in Western Europe. The growth rate, however, was only 0.2% in Western Europe, where buyers’ confidence was restrained by soaring oil prices, changes in taxes, the global credit crunch and declining purchasing power. In the new EU member states, where car density is still much lower, a steady growth of 13.9% was recorded throughout the year. The highest growth rate in new car registrations was seen in the Baltic States (34%), Bulgaria (26%), Poland (23%), and Romania (22%).

Of the 16 million new passenger cars registered, 53.3% were diesel powered. The continuous rise in demand for diesel cars is explained to a large extent by improved diesel engine technology, significant increases in fuel prices and greater consumer demand for fuel efficiency, according to ACEA. The highest share of diesels was registered in Luxembourg (77.2%), Belgium (77.0%), France (73.9%) and Spain (70.9%).

In 2006, there were 251 million vehicles on European roads (not including around 10 million additional cars in the new EU members). Passenger cars represent 88% (230 million) of all the vehicles on the European roads. The European car fleet is highly concentrated in five main markets—Germany, Italy, France, UK and Spain—and is characterized by a high diesel penetration of 30%.

Automotive industry market forecasts point to stagnating car registrations in 2008. New member states are likely to improve their 2007 result at a somewhat slower pace (+9%), while Western European market will possibly slightly deteriorate (-0.6%). Of the main markets, only France and Germany are expected to register more cars than last year.

Source: ACEA (Press release | Economic Report 02/2008)