The level of sales is not directly related to the price of Brent
- Inovev wanted to know if the evolution of the price of Brent oil affects the evolution of auto sales. Used as a standard for setting the price of crude in the stock markets of much of the world, Brent is a good benchmark for the price of oil. The price of Brent obviously has an impact on the price of fuel (gasoline and diesel) even if it tends to smooth out the sharp rises and falls in Brent.
- Inovev compared the official Brent price established annually from 2000 through 2020 against sales of passenger cars in Europe. When we observe the two curves representing these two parameters, we realize that the price of Brent does not have a direct impact on auto sales, even if we take into account the fact that the price of fuel is smoothed compared to the price of Brent.
- We can simply observe that the increase in the price of Brent between 2010 and 2014 coincides with a drop in auto sales, but that it started in 2008, at the beginning of the financial crisis. However, the increase in the price of Brent between 2003 and 2007 did not trigger a decline in sales. On the other hand, the fall of the Brent price between 2015 and 2016 coincides with an increase in sales, but this had started in 2014 and continued until 2019, while the price of Brent had risen between 2016 and 2018. Finally, the price of Brent fell in 2020 as the auto market collapsed.
- There is therefore no direct link between the price of Brent and car sales in Europe. The evolution of the automotive market is impacted at short term by definitively other parameters.
Contact us: info@inovev.com