These are some of the findings of the 2014 Q3 Automotive Market Report published by EurotaxGlass’s.

In the report, chief editor Dean Bowkett comments that Europe remains a divided marketplace with the UK car market now in full recovery and actually showing signs of heading downwards, Spanish new car sales still rising but RVs now almost recovered and being squeezed by new car discounts and France where new car sales are still volatile and years of diesel passion are being swept aside by government intervention putting significant pressure on the used car market.

Mr Bowkett added that whilst new car sales in the EU28 and EFTA region should end the year up around 5.2% over 2013 it is still 18.9% lower than in 2007. Whilst this should create upside opportunity the UK market is almost at record breaking levels and the risk of a Eurozone triple dip recession actually puts more downside risk on the 2.1% forecast growth for 2015.

For the 2015 full year, new car sales forecasts look set to hit 13.26 million for the EU28 and EFTA3 based on current trends, with a lowest estimate of 13.1 million vs. 12.98 million in 2014.

Mr Bowkett also said that capacity utilisation has now stabilised and allowing for the fall in new vehicle sales in Russia it is actually improving across West and Central Europe.

Meanwhile production continues to outstrip sales across cars and light commercials by around 4.5% p.a. but this should ease to under 4% by 2016 and less than 3% by 2017 with a potential upside should Russia start to realise its sales potential.

He added that the rise of PCP (balloon finance) over the last few years, particularly in the UK, was seen as creating a risk to residual values for 3-4 year old vehicles as these retail returns added to the trade volume from leasing companies.

However OEMs have been exploiting those countries where RVs have been rising and have been pulling forward cars with positive equity creating an added burden to younger aged vehicles coming from rental companies and dealer registrations.

Mr Bowkett said that EU legislators and EU member governments have thrown away years of pro-diesel policy and are now on the attack which is creating a significant risk to demand for new and used diesel cars and these actions are creating a degree of unwelcome uncertainty which could start to stifle the automotive market.

He added that the firm’s three-year RV forecast assumption has edged downward slightly and it now believes RVs will generally remain stable across Europe with only some markets like Italy seeing significant growth in used values as they continue to recover some of the loss incurred during the worst of the economic crash.