European market disrupted by new WLTP standards since July 2018
- The European VP market (29 countries) has been severely disrupted since July 2018 due to new cars obligation to become compliant with the new WLTP standards.
- The European market grew by 10% in July 2018 and by 30% in August 2018, while the increase in the first half did not exceed 2.8%. This sudden and spectacular increase is largely due to the need to de-stock as many vehicles as possible approved under the old NEDC protocol. From 1 September 2018, manufacturers had to market their models according to the new WLTP protocol, which requires new engine settings. There is also uncertainty about the levels of CO2 emissions under the WLTP protocol and therefore the taxation to be applied after September 1, which encouraged companies to anticipate their fleet renewals. There was also an unusually high proportion of vehicles registered as demonstration models.
- These over-registrations, due to massive destocking of models built to the old NEDC standards, are in fact anticipated purchases that will therefore not be occurring in the last quarter of 2018.
- This is why we expect a decline in the European market in the last four months of the year, but the car production should however benefit from the recovery of inventories in WLTP standards vehicles.
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