New passenger vehicle registration in Europe (EU, EFTA, and the UK) increased by 0.9% during the first quarter of 2021. The recovery was strongest in March 2021 when sales increased by 87% in the EU. However, the European new car market was still a quarter — over a million vehicles — weaker than during the first quarter of 2019. The growth potential in the European new car market is strong but will depend not only on the broader economic recovery but also on the influence of lockdowns in various regions and the ability of carmakers to produce cars while supply chains are uncertain.
Although car sales in Europe increased slightly in 2021, sales were still the second lowest first quarter of the year for the previous decade. Car sales in the European Union increased by 3.2% and in EFTA by 5.1% but the 12% contraction in the UK was a strong drag on the whole market.
Germany remained the largest single-country car market in Europe during the first quarter of 2021 despite sales slipping by 6.4%. New car registrations in the UK were even weaker and the 12% contraction resulted in Britain slipping from the second-largest new car market in Europe to only fourth. However, the UK market could potentially recover fast, as many lockdown measures will no longer apply during the second quarter of the year.
Car sales in Italy increased by 29% to make the Italian market the second largest new car market in Europe — up from fourth a year ago. The French new car market grew by 21% to again take third place. In Spain, new car sales were down 15%.
The strongest growth in car sales in Europe during the first quarter of 2021 was in Sweden, Italy, and France. Sweden was the only European country with higher sales thus far this year compared to 2019 — largely due to weak sales in 2019 after a tax regime change.
The weakest performance of any European new car market thus far in 2021 was Portugal with sales down by almost a third. Of the larger markets, the Netherlands performed weakest with sales down by a fifth.
Volkswagen remained the best-selling car brand in Europe despite losing market share during the first quarter of 2021.