New passenger car sales in France declined by 26.3pc to 126,047 units in November from the prior month, according to Comité des Constructeurs Français d’Automobiles (CCFA). In Italy, new car sales fell by 11.3pc to 156,100 units during the same period, according to the Associazione Nazionale Filiera Industria Automobilistica (ANFIA) on December 1.
Second lockdown affects French registrations
A resurgent local outbreak of COVID-19 has no doubt weighed on French car sales as many private buyers adhered to a second national lockdown and put off purchases given economic and employment uncertainty caused by restrictions on movement.
New passenger car sales were 27pc below levels recorded in the same month last year with alternative data sets showing that local used car registrations, particularly of vehicles 15 years and older, surged in Q3 2020.
Davis Index believes some commuters have swapped close-proximity public transport, such as buses and trains, for old used vehicles, while those looking to upgrade, purchase second-hand cars rather than costlier new vehicles.
Lockdown restrictions were lifted on shops, that adhere to strict hygiene measures, permitting them to reopen from Nov 28 and enabling consumers to leave their homes for longer periods of time; likely benefitting car sales in December.
Lack of tourism hurts Italian car sales
Italian national registrations were pulled down in November by a sharp decline in sales to short-term rental companies suffering from a decimated tourism industry, despite a surge in new vehicle purchases to private buyers last month, likely funded by a government stimulus package.
Davis Index estimates that new car registrations were largely driven by purchases that had been held off until the Italian government increased the scale of the car sales incentive stimulus program from €150mn to €450mn from Aug 1.
The Italian government’s stimulus program provides €3,500 for scrapping vehicles that are more than 10 years old when purchasing a new Euro 6 model vehicle with CO2 emissions of up to 110g/km and priced up to €40,000.
Car dealers are obliged to contribute up to €2,000 towards the sales incentive, while the government is also offering incentives of up to €8,000 for consumers purchasing zero-emission vehicles.
While Italy’s stimulus program will no doubt drive car sales in the short term, Davis Index calculates that this enlarged program will likely only support the purchase of an additional 130,000 units.
As a result, Italian new passenger car sales only declined by 8.3pc compared with volumes registered in the same month last year. Davis Index believes this stimulus program limited the impact of regional lockdowns and a decimated tourism industry on new car sales.