New passenger car sales dropped by 8.3% y/y (wda) in July, down to 21,816 units, according to figures of the SDA, the car importers’ association. While there were was a slight increase in non-adjusted terms (up 0.8% y/y), the number of working days was two more this year than in 2018. In January-July, passenger car sales fell by 9.1% y/y, reflecting much worse performance earlier this year. There is a strong base effect in play and there will be an even stronger one in August, as sales in July and August 2018 strengthened, in anticipation of the new environmental testing standards that kicked off in September 2018. Respectively, it will lead to strong growth rates from September onward, as sales in H2 2018 fell visibly after the new standards were introduced, as car makers needed some time to adapt.
Skoda traditionally outperformed the market, as it saw a jump of 15.1% y/y in July sales, even though it saw a 2.6% y/y decline in January-July. Still, Skoda remains the undisputed market leader, accounting for 34% of the new car market in January-July. Speaking of new cars, used car sales performed better yet again, rising by 2.6% y/y (wda) in July and falling by only 0.5% y/y in January-July. With an uncertain economy outlook, it is not surprising that sales move towards used cars, which represent a visibly lower investment.
There was a slight rearrangement in sales by type of fuel, as diesel cars performed better than petrol ones for the first time in years, seeing a 6.6% y/y drop in July, compared to 9.1% y/y for petrol ones. Petrol car sales are still in the lead, as they had a 70.2% market share in January-July, higher by 4.2pps y/y, while diesel cars reported a market share at 27.2%, lower by 3.9pps y/y. Yet, there are also some base effects in play, as there was a big adjustment last year due to the new testing standards.
Total vehicle sales fell by 3.1% y/y in July, down to 51,930 units, out of which new vehicle sales fell by 7.1% y/y, while used vehicle sales saw an increase of 3.3% y/y. In January-July, total vehicles fell by 2.7% y/y, with new vehicle sales falling by 4.4% y/y. The overall impression from the market is that demand will be falling further, though a low base will boost growth in later months. Even with that in hand, the odds are that annual sales will decline this year, leaving 2018 as the record high.