EU New Car Sales Drop, European Automakers Open Lower

EU Car Registrations

New car registration slumped 22.8% year-over-year in December 2021 in the European Union, as per today's data from the European Automobile Manufacturers' Association (ACEA). [1]

This was the sixth consecutive month of decline, with most regions having faced double-digit drops. A total of 795,295 new passenger cars were registered in December 2021, down from 1,030,551 a year ago.

For the whole of 2021, there were 9,700,192 new vehicles registered in the European Union, down 2.4% from 2020. The report cites "the semiconductor shortage that negatively impacted car production throughout the year, but especially during the second half of 2021" as the reason for the slide in new car sales last year.

Germany's registrations fell 26.9% year-over-year in December and 10.1% during the full 2021.

Why Trade Shares with FXCM?

  • $0.00 Commission*
  • Mini Shares - Fractional Share Trading with minimum trade sizes of 1/10 of a share.
  • Low Margin Requirements

The auto industry is very important for the European economy and as per the European Automobile Manufacturers' Association it accounts for 6.6% of all EU jobs and for more than 8% of the EU's GDP.

Broader Risk Aversion

The poor sales report weighs on the stocks of major European car makers and the GER30, but sentiment is generally poor today. Aggressive tightening expectations around the Fed and Middle East tensions are some of the factors that are in play.

The ECB is far behind in the tightening path than its major counterparts, as it is expected to begin reducing its asset purchases from March, but where the Fed goes, everyone does.

Tensions in the Middle East spiked overnight after a drone strike in the United Arab Emirates, one of OPEC's largest oil producers, sending USOIL and UKOIL to their highest levels since October 2014.

Market Reaction

As a result of these developments, some major European car makers open lower today.

BMW.de had risen above 100.00 for the first time since December 2015 last week, helped by solid sales figures for 2021. Today however, it sheds more than 1%, breaching 98.00.

France's Renault Group announced yesterday a decline of 4.5% y/y in 2021 sales, with 2,696,401 vehicles sold. [2]

The Renault brand was responsible for most of those sales, with 1,693,609 units, a 5.3% drop compared to 2020.

Renault's electrified vehicles accounted for 30% of last year's passenger car sales in Europe, up from 17% in 2020.

Today RNO.fr trades more than 1% lower, following yesterday's profits.


Past Performance: Past Performance is not an indicator of future results.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 18 Jan 2022 https://www.acea.auto/pc-registrations/passenger-car-registrations-2-4-in-2021-22-8-in-december/

2

Retrieved 25 May 2022 https://en.media.renaultgroup.com/news/renault-group-continues-to-grow-profitable-sales-26a2-989c5.html

Disclosure
*

When executing customers' trades, FXCM can be compensated in several ways, which include, but are not limited to: spreads, charging commissions at the open and close of a trade, and adding a mark-up to rollover, etc. Commission-based pricing is applicable to Active Trader account types.

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}