Authored by Dean Bowkett, technical director and chief editor, the report shows that 2013 looks set to end the year with new car sales down 3.9% at just over 12.2 million sales for the EU27 and EFTA3, which is the lowest like-for-like performance since 1997.

For the year to date, Mr Bowkett says that volume brands remain the worst hit, with Citroën down -13.2%, Peugeot down -9.6%, VW down -6.7%, Renault & Ford down -5.4%, Opel down -3.8% and Toyota down -3.0%.

He adds that premium brands are still faring better especially Jaguar Land Rover at +10.1% and Mercedes at +6.6% but BMW is only up 0.8% and Audi is down -2.5%.

Elsewhere, there is a mixed picture in YtD performances. Hyundai and Chevrolet recovered some of the earlier year loss to stand -1.0% and -20.3% respectively YtD. Kia, Nissan and Suzuki slipped back a little and are currently +0.5%, -3.8% and -8.5% YtD.

The report adds that the dilemma of European capacity production versus sales continues, adding that despite pushed sales and high discounts inventory levels are now rising with stock coverage for Europe of 100 days. It also says that, with only low 2014 sales growth forecast, production will have to be cut, even if just at a shift level, or stocks will continue to grow adding further new vehicle discounting pressure.

EurotaxGlass’s also highlights that just three markets (Germany, UK and France) now represent 57.2% of all new car sales across the ACEA basket, leading to its view that the “Big 5” are now becoming the “Big 3”. It adds that the economic situations in Spain and Italy mean that this is unlikely to change for at least the next three years.

The latest EurotaxGlass’s report also includes the AMCI (Automotive Medium Cycle Index) of residual values of passenger cars at 36 months old. The data shows that discounting is starting to impact 36-month values. EurotaxGlass’s comments that A-segment values at 36 months are relatively close to pre-crisis levels in mainland Europe and very strong in the UK. However, four out of five countries are showing values generally lower than in the previous three years. Germany is the exception as used car values fell later than many other markets during the crisis and took longer to recover.

It also notes that the move by premium brands and crossovers to enter smaller segments is still helping push up segment averages. Meanwhile SUV and crossover sales especially in B and C-segments are faring better than traditional saloons and hatchbacks

“Big 5” markets in detail

EurotaxGlass’s also looks at the main markets in more detail, commenting that the French economic situation is still on the consolidation track. New car demand is expected to end the year down 8.2% and, whilst some forecast healthy growth between 2014 to 2016, next year is likely to be flat at best, followed by a circa 2% to 4% growth for the following two years.

It adds that the RV trend for the next 2-3 years is downwards with a circa 1-1.5 pp fall anticipated next year and possibly a 1-2 pp higher fall for the following two years depending on the impact of the tax reforms.

For Germany, EurotaxGlass’s says that the economy is on track for sustained steady growth, with positive and still rising consumer and industrial confidence likely to maintain this growth over the following two years but still well below the 3% seen in 2011. It says that new car sales are set to end the year down 6.1% and under the magic three million mark for only the second time since ACEA started recording sales in 1990. However, this is likely to be a one-year drop with the following two to three years seeing a gradual recovery to around 3.2m.

It adds that it believes RVs may rise by 1-2pp next year before flattening out through to the end of 2015.

Moving on to Italy, EurotaxGlass’s says the market is still full of risk and uncertainty. Since 2007 the new car market dropped by 47% from 2.5m to 1.3m (forecast 2013) and is unlikely to get above 1.5m for the next three years. The bright side is regarding a niche market where gas vehicles have a 15% market share although hybrids and EVs etc remain marginal.

Mr Bowkett says that he believes RVs should stabilise over the coming months before starting to rise by 2pp per annum over the next two years as fiscal policy starts to kick in, restoring some confidence in the market.

For Spain, the firm says there is some hope but still a long way to go. The Spanish government has announced a further rollover of the current PIVE scrappage scheme, although PIVE4 is not applicable to nearly new cars.

It adds that the economic outlook for Spain and consumer focus and demand means RVs especially for young vehicles (under 12 months) are going to fall further, with medium-aged vehicles (under 36 months) likely to see a slow decline in RVs over the coming months before stagnating for 2-3 years, whilst older vehicles (over five years) are expected to continue to rise.

Conversely for the UK, EurotaxGlass’s say the market is in a healthy and stable position but may overheat. New car sales are set to end the year almost 11% up and almost hitting pre-crisis levels, however much of these sales are being artificially created through discounting and pre-registrations.

It concludes that overall UK used car values are expected to decline 0.5-1% over the coming months before remaining generally flat in real terms or rising around 1% per annum due to inflationary factors. But stock shortages in LCVs will result in a stronger performance seeing prices rising between 2% and 5% over the next year or so.

Looking ahead to the next three years, EurotaxGlass’s says with 2013 being the worst year for 16 years any growth has to be considered as being off a very low base but despite this sales are still set to rise across the EU27 & EFTA3 only relatively slowly (2014 2.0%, 2015 4.1%, 2016 3.1%). It adds its view that electric vehicles continue to be little more than a niche and a distraction, although the entry of premium brands into this area may stimulate stronger interest.