Should we expect a decline in the European car market in 2020?

  •   24/01/2020 - 10h10
  •   Adeline HARMANT

Because of the significant investments in the creation of electric car models, car manufacturers are currently anticipating a more or less significant decline in this market in Europe during the year 2020. Let us take stock of the situation together.

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Should we expect a decline in the European car market in 2020?

Towards a market in the red?

Most car manufacturers are therefore preparing for a turbulent 2020 with a high possibility of a market downturn. Indeed, an association made up of several manufacturers has announced a forecast drop in passenger car sales in the European Union of around 2% for this year, which would be the first decline in 7 years. Indeed, it should be noted that the automotive market grew by 1.2% in 2019.

This trend reversal comes at a time when these manufacturers are forced to invest large sums in the electrification of their vehicle ranges. They have therefore asked their political leaders to create favourable conditions for reducing greenhouse gas emissions from vehicles while maintaining the competitiveness of the sector. However, it is the combination of this market contraction and the investments needed at the European and global level that heralds a difficulty for public authorities in managing the transition to carbon neutrality.

 

Requests from ACEA :

In the context of these forecasts, ACEA called for, among other things, technological neutrality, which means that no technology should be imposed and that vehicles that cannot contribute to reducing CO2 emissions should not be banned. In this way, the manufacturers intend to avoid a forced switch to hybrid vehicles and a demonisation of diesel, which ultimately emits less CO2 than petrol. Sales are also impacted by the Volkswagen rigged engine deal in 2015 but still account for a third of total sales in the sector today.

On the other hand, and in order to promote the development and market presence of electric vehicles, the various car manufacturers want governments to develop a wider network of charging points throughout Europe as a matter of urgency. The AECA is also calling for incentives for the purchase of electric vehicles to counter their high price and so as not to slow down sales and fleet renewal in Europe.

Some manufacturers also point out that carbon-neutral road transport is still possible and can be achieved before 2050, but that this means that things will have to change more quickly in the years to come.

In view of this information, we advise you to be cautious when taking positions in this sector.