©2014 Aranca. All Rights Reserved. www.aranca.comIf you wish to reproduce or use this infographic in any format, please email us at syndicate@aranca.com

Compiled by: Darsh Lathia

High unemployment rate and financial instability in European nations have dented the sales of

passenger cars in the past decade and the market is not expected to regain lost ground before

the end of 2020. Owing to intense pressure of competition in the home market, foreign markets

are looking more attractive from a trade perspective. The huge demand from Asian countries for

passenger cars is changing the trade flow and the automotive value chain. The passenger car

manufacturers in Europe need to restructure and adjust capacity to match demand from foreign

countries better.

Across the globe, a majority of countries are setting stringent greenhouse gas targets as well as air

quality rules for passenger cars. As a result, passenger car manufacturers are required to develop

a portfolio of propulsion technologies, dominated by advanced combustion engine technology. In

addition, they should add more value in alternative powertrain concepts (such as electric and fuel

cell vehicles) and innovative solutions for safer and cleaner passenger cars.

Aranca’s Views

2006-2014

Figures in million units

1995-2012 Figures in actuals

Passenger Car Density per 1,000 Inhabitants - A Quick Look at Some European Nations

Passenger Car Density per 1,000 Inhabitants in EU

2012 Figures in actuals

2014 Figures in actuals

Note: Registrations of new passenger cars is a proxy for sales in the European Union

CAGR (2006-14): -2.4%YOY

(2014-15): 3%

New Passenger

Car Registrationsin Europe*

15.8 16.0 14.7 14.5 13.8 13.6 12.5 12.3 13.0 13.4

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

14.41.1

0.4

14.41.2

0.4

13.21.2

0.4

13.30.9

0.4

12.60.8

0.4

12.30.8

0.5

11.30.8

0.5

11.10.8

0.5

13.0 13.4

EU15 EU10 EFTA

Note - * Europe = EU27 + European Free Trade Association (EFTA);

EU27 = EU15 + EU10

EU15 = Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK

EU10 = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia

EFTA = Iceland, Norway, SwitzerlandData for Cyprus and Malta unavailableE refers to Estimated

New Passenger Car Registrations in

Europe Dip 2.4%Europe’s well-developed automotive industry is su�ering from overcapacity and fierce competition pushing down both prices and profits. Consequently, car registrations are dipping year after year. Between 2006 and 2014, fewer people bought new cars and the number of new registrations declined more than 2.8 million units. Car sales today are at levels last seen in early 1990s.

Luxembourg663

Italy621

Finland563

France512

Poland486

Netherland472

Czech republic

448

Hungary301

1995 2005 2012

380 448 487

EU15 Country No.ofPlants

Austria 1

Belgium 4

Finland 1

France 14

Germany 25

Italy 10

Netherlands 4

Portugal 1

Spain 10

Sweden 3

United Kingdom 19

Total 92

EU10 Country No.ofPlants

Bulgaria 1

Czech Republic 4

Hungary 3

Poland 2

Romania 2

Solvakia 3

Solvenia 1

Total 16

The European Automobile Manufacturer's Association (ACEA) members assemble passenger cars in around 18 European countries

VW Group25%

Renault Group9%

General Motors8%

Fiat Group6%

BMW Group6%

Daimler6%

Toyota Group6%

Hyundai3%

Others14%

PSA Group11%

Ford7%

Market Share

Europe produced 12.3 million cars in 2013, 17% of the 73.1 million produced globally.

The sector is also a key driver of knowledge and innovation, representing Europe's largest private contributor to R&D, with USD43 billion invested annually.

Europe's cars are the cleanest, safest and quietest in the world. Noise from passenger cars has been reduced by 90% since 1970.

Key Facts

The demand for passenger cars from foreign countries, especially BRIC (Brazil, Russia, India, China, and South Africa) nations, has led to an increase in exports of passenger cars. In 2013, export of passenger cars by EU nations rose 2.1% on year-on-year basis with 5.9 million cars exported to foreign countries.

Drivers

There are barriers to internal trade within the EU restricting it to form a single market for the development, production, sale and aftermarket support for vehicles.

European labor market remains very weak, with more than 24 million people unemployed across the 28-nation union. Due to unemployment, people do not have enough funds to purchase new vehicles.

Challenges

Source: European Automobile Manufacturers’ Association; OANDA Average Interbank Rate (January 01, 2013 to December 31, 2013 Average) - Euro (€) to US Dollars ($) = 1.3279, Statista - Market share of selected car manufacturers in the passenger car market in Europe in 2013, based on new registrations , The New York Times - Auto Sales in Europe Rise for 14th Consecutive Month, Nov 18, 2014; Organisation Internationale des Constructeurs d’Automobiles (OICA).

Passenger Car Production and Assembly Plants

in EU15 and EU10

Market Share of Passenger Car

Manufacturers in Europe 2013

Sales of passenger cars in Europe had reached a record 16 million units in 2007, but bottomed out in August 2013 at levels not seen since 1990.