2021 (January) Europe: Car Sales and Market Analysis

In January 2021, the European new car market contracted by 26% — SUVs took a record 44% share of sales in Europe (EU, UK, EFTA).

In January 2021, the European new car market contracted by 26% -- SUVs were the best-selling segment took a record 44% share of sales in Europe.
Toyota Yaris -- Top-Selling Car Model in Europe in January 2021 © Toyota — Toyota Yaris — Top-Selling Car Model in Europe in January 2021 © Toyota

New passenger vehicle registrations in Europe slumped by 26% in January 2021 to only 839,600 cars — the lowest January European new car market since 1982. Car sales in almost all countries in the European Union were lower by double-digits, including Germany where sales were down by a third. The Toyota Yaris was the top-selling car model in Europe in January 2021 followed by the Peugeot 208 and Dacia Sandero. The VW Golf slipped to fourth.

Latest European Car Market Statistics 2021: January, February, March, Q1, April, May, June, HY, July, August, September, Q3, October, November, December, Full Year — 2020: Q1, HY, Q3, Full Year

European New Car Market in January 2021

New passenger vehicle registrations in Europe started 2021 on another weak note with sales down by 26% to only 839,525 cars sold in the European Union (EU), EFTA, and the UK. In January 2020, new passenger vehicle registrations were 1,138,057 cars. The start of 2021 marked the lowest January new car sales in Europe since 1982.

Felipe Munoz, global analyst at JATO Dynamics commented: “Despite efforts made by governments and OEMs to boost the registration of pure electric cars, it has not been enough to offset the impact of the global pandemic and local lockdowns”

Car dealerships across Europe continued to feel the negative effects of the Covid-19 pandemic. In key markets such as Germany and Spain, volume dropped by 32% and 52% respectively. January was also unlikely to meet December’s success due to the tax breaks enjoyed by customers at the end of the year. Munoz continued: “Changes to tax calculations from January 1^st accelerated the demand in December, with consumers registering new vehicles ahead of these changes.”

Despite the overall negative trend, there were a few exceptions. In Sweden volume increased by 23% compared to January 2020. This came as a result of changes to Sweden’s bonus-malus taxation policy (introduced on 1^st January 2020), which caused an increase in vehicle registrations in December 2019, as customers took advantage of the favorable taxation that would no longer be in place for high-emissions vehicles. In Norway, registrations increased by 8% as consumers were once again able to visit showrooms, and demand for EVs continued, fuelled by heavy incentives.

Car Sales in Europe by Market Segment in January 2021

SUVs sold in higher numbers in Europe in January 2021 than ever before. Sales of SUVs exceed compact and subcompact sales combined. However, SUVs in Europe are increasingly hardly different from regular cars with marketing playing a major role in positioning the car as a SUV rather than a standard compact car.

In January 2021, SUVs took a 44% market share of all new passenger vehicle registrations in Europe – the highest share ever recorded for SUVs. Munoz noted: “The demand for SUVs shows no signs of stagnation, and Europe is showing similar patterns of growing popularity to those seen in the USA and China. Considering their higher prices and emissions levels, the results are particularly noteworthy”. In total, the volume of SUVs amounted to 368,100 units, down by just 18% compared to January 2020.

Small SUVs accounted for 36% of total registrations, with volume falling by 18%. While compact SUVs made up the majority of demand with 177,500 units, also down by 18%. Midsize and large/luxury SUVs made up 15% of total volume for SUVs, with 56,800 units – down by 20%. Volkswagen, Peugeot, and BMW were the top-selling SUV brands in January, but Ford, in fourth position, took first place for market share growth.

Top-Selling Car Makers and Brands in Europe in 2021 (January)

The Volkswagen Group easily remained the largest carmaker in Europe in January 2021. It was followed by Stellantis — the new group formed by the merger of PSA and FCA — that are now well ahead of third-placed Renault.

By manufacturer, Volvo (Geely) gained the largest market share, following increases in the demand for its SUVs and midsize cars. The Volvo XC40 was Europe’s top-selling premium vehicle last month – its volume soaring by 58% to 10,590 units. Conversely, Volkswagen Group fell by 0.9 points due to its exposure to the German market, which favored the Volkswagen Golf, Europe’s top-selling car in 2020.

Despite sales dropping by a third, Volkswagen remained the largest car brand in Europe by far in January 2021. VW was followed by Peugeot and Toyota that had sales down by less than a fifth. BMW was the top performer of the ten largest brands with sales down by only 16%.

Top Ten Car Models in Europe in January 2021

January 2021 also saw notable shifts across the model rankings of the top-selling car models in Europe. The VW Golf dropped three positions and started the year as the fourth best-selling car, behind the Toyota Yaris, Peugeot 208, and Dacia Sandero. The Peugeot 2008 topped the SUV rankings, up by a significant 87% in contrast to the 7% and 2% drops seen by its competitors, Volkswagen T-Roc and Renault Captur respectively.

Other models that posted significant increases included the Ford Puma (+72%), Ford Kuga (+258%), BMW X3 and Kia Niro (+12% each), Mercedes GLA (+18%), Suzuki Ignis (+25%), Smart Fortwo (+208%) and Porsche Macan (+23%).

Among recently launched cars, the most registered were the Mercedes GLB (3,802 units), Volkswagen ID.3 (2,909 units), Cupra Formentor (2,826 units), Citroen C4 (2,491 units), BMW 2-Series Gran Coupe (2,409 units), Polestar 2 (1,290 units), Porsche Taycan (1,017 units), Toyota Proace City Verso (915 units), Audi E-Tron Sportback (908 units), and Land Rover Defender (871 units).