How has the European car market evolved in the last 15 years?

European-segment-development-2001-2016-small-crossoversA few weeks ago, when we were looking at which cars were leading their segments in Europe in 2016, one of our readers wondered how the market as a whole has evolved over the past decades: which segments have grown and which have decreased and what trends are visible in the market? As it turns out, the total market volume in 2016 is actually very comparable to that of 2001, as the European car market had a size of just over 15 million sales both last year and 15 years ago. Of course, in the meantime there have been great fluctuations, as the market peaked at over 16 million in 2004 and then crashed to just 12,3 million in 2013, and also between the segments there have been shifts in the period between then and now. But overall there’s a clear trend visible: mainstream brands have stagnated while luxury brands have floundered, MPVs made a brief successful run in the first half of the 2000’s, but since then it’s been all about crossovers and SUVs, while regular cars have been down across the board. So let’s take a more in-depth look at the trends we can see happening for the past 15 years.

Segment-by-segment

  2001 2016 Change
Minicar 1.029.312 1.330.438 301.126
Subcompact 3.890.735 2.724.787 -1.165.948
Compact 3.271.122 2.380.154 -890.968
Midsized 1.597.337 625.185 -972.152
Large 51.202 1 -51.201
Small MPV 46.694 304.451 257.757
Midsized MPV 922.904 707.415 -215.489
Large MPV 228.535 154.288 -74.247
Small SUV 63.183 1.439.374 1.376.191
Midsized SUV 172.369 1.311.194 1.138.825
Large SUV 76.227 54.783 -21.444
Small Premium 76.882 284.475 207.593
Compact Premium 373.464 939.273 565.809
Midsized Premium 964.691 707.939 -256.752
Large Premium 529.610 373.893 -155.717
Limousine 61.593 40.837 -20.756
Compact Premium SUV 0 299.795 299.795
Midsized Premium SUV 53.366 476.909 423.543
Large Premium SUV 126.353 288.831 162.478
Exotics 2.929 5.886 2.957
Sports Cars 24.671 29.202 4.531
  15.056.542 15.141.170 84.628

 

Peugeot-607-auto-sales-statistics-EuropeThe two biggest segments of the market in absolute volume terms have als been the among the biggest losers with sales of subcompact cars (Ford Fiesta etc.) down by almost 1,2 million units and sales of compact cars (Volkswagen Golf etc.) down almost 900.000 units. And mind you, this is in a stable overall market. Small premium (Audi A1 etc.) and compact premium models (BMW 1-Series etc.) have somewhat made up for the loss, but not all of it by a large margin. The worst hit in relative terms is the mainstream midsized car segment (VW Passat etc.), down almost 1 million units in 15 years time. The mainstream large car segment (Renault Latitude) has even become extinct, but it wasn’t that relevant anymore even in the early days of the new millennium. Here, luxury brand’s can’t be blamed as these segments are down with six digits as well. The only mainstream car segment to show any growth at all is the low-margin minicar segment (Fiat 500 etc.), adding 300.000 units.

Small MPV’s (Nissan Note etc.) seem to have grown well for the past 15 years with sales up sixfold, but this disguises the fact that they surged tenfold between 2001 and 2005 before slowly declining to their lowest figure since 2004. The same trend is visible for midsized MPVs although less extreme: peaking in 2005 and down by almost half since then. So where did the growth come from? Crossovers and SUVs of course, most notably the small and midsized segments, both mainstream and premium, adding almsot 2,5 million sales to the mainstream market and another 885.000 to the luxury market.

Cars vs. MPVs vs. SUVs

 Shares 2001 2006 2011 2016
Car 87,6% 78,6% 74,4% 65,4%
MPV 8,8% 14,0% 12,0% 8,0%
SUV 3,6% 7,4% 13,6% 26,6%

 

Renault_Scenic-first_generation-auto-sales-statistics-EuropeSales of regular cars (hatchback, sedan, station wagon etc.) have been in a virtually continuous decline since the new millennium, dipping from almost 88% of the total market to under two thirds, while SUVs have grown from a tiny 3,6% of the market to more than a quarter, with most of that growth appearing in the last six years. MPVs had a nice run in the mid-2000’s, peaking at over 2 million annual sales from 2004 to 2007, reaching as much as 14% of the total market, before plunging by almost half of those figures as crossovers and SUVs started to become popular.

 

Mainstream vs. luxury

 Shares 2001 2006 2011 2016
Mainstream 83,8% 81,7% 79,2% 76,4%
Luxury 16,2% 18,3% 20,8% 23,6%

The luxury brands have been chipping away at the share of the mainstream segment for all of the past 15 years. Their share has grown by almost half, from 16,2% in 2001 to 23,6% of the overall market in 2016. Most of this growth comes from the German Big 3 as other brands have very little chance to break their dominance. Sure, Volvo is a relevant player and Jaguar Land Rover has enjoyed nice growth in recent years, but they remain unable to become tier-1 players. The only bright spot is the premium midsized SUV segment, where the Volvo XC60 has been dominant even as it’s due to be replaced, and where the Range Rover Evoque also competes nicely against the Germans.

Land_Rover_Freelander-auto-sales-statistics-EuropeThe reason for the growth is also obvious: entering new segments. The small premium segment and midsized premium SUV segments were virtually insignificant 15 years ago, but added up to 760.000 last year. The Mini and Audi A2 were the only two players in the former, and the Land Rover Freelander was all by itself in the latter until the BMW X3 came along in 2004, followed by the XC60, Q5 and GLK not until late 2008. The compact premium SUV segment wasn’t even created until 2009 when BMW launched the X1, followed by the Mini Countryman the next year. Fast forward 7 years and  300.000 units were sold of six different models. Growth of the compact premium and midsized premium SUV segments have grown significantly as the number of players increased too.

Relative shares by segment

 Share of total market 2001 2006 2011 2016
Minicar 6,8% 7,6% 9% 8,8%
Subcompact 25,8% 24,8% 21,8% 18%
Compact 21,7% 19,9% 17,2% 15,7%
Midsized 10,6% 7,9% 6% 4,1%
Large 0,3% 0,2% 0,1% 0%
Small MPV 0,3% 3,3% 3,2% 2%
Midsized MPV 6,1% 8,6% 6,8% 4,7%
Large MPV 1,5% 1,6% 1,2% 1%
Small SUV 0,4% 0,6% 3% 9,5%
Midsized SUV 1,1% 2,6% 5,4% 8,7%
Large SUV 0,5% 1,3% 0,4% 0,4%
Small Premium 0,5% 0,7% 2,3% 1,9%
Compact Premium 2,5% 4,5% 4,6% 6,2%
Midsized Premium 6,4% 5,5% 4,8% 4,7%
Large Premium 3,5% 3,7% 3,4% 2,5%
Limousine 0,4% 0,4% 0,3% 0,3%
Compact Premium SUV 0,0% 0,0% 1% 2%
Midsized Premium SUV 0,4% 0,6% 1,7% 3,1%
Large Premium SUV 0,8% 2% 1,4% 1,9%

Here you can see the trends between the segments even better: all red for the mainstream car segments except for minicars, first green for MPVs but then all red, while crossovers and SUVs are mostly green, except for the large segment. Small premium and premium SUVs are also mostly up, while midsized and large premium sedans (and station wagons) are down. The mainstream subcompact, compact and midsized segments used to be the heart of the European car market, making up 58,1% of total sales in 2001. By 2016, that share had dipped to just 37,8% as luxury brands and crossovers have grown steadily.

What’s next?

Is it a surprise to see these trends over the past 15 years? Not at all, but it’s nice to visualize them and put numbers behind them. We all know that there’s been a shift away from the mainstream car segments to first MPVs and then crossovers, and we all know luxury brands have grown significantly as they’ve entered new segments and expanded their line-ups downward.

Tesla-Model_S-Renault_Zoe-EV-sales_figures-Europe-Q1-Q3-2015

So what’s next, which segments will be the engines of growth for the next few years? It’s safe to say that crossovers will continue to deliver strong growth in Europe, as they also will in the US and China, and most notably the small and midsized segments, especially since a number of big brands are about to enter those segments or just have entered them. Small MPVs will disappear, but the midsized MPVs will stabilize, just as the subcompact and compact segments appear to have hit rock bottom. The midsized segment, both mainstream and premium, will continue to shrink as it is influenced the most by the shift towards crossovers. But most of all, the segment we haven’t featured here at all because it’s just a few years old, that of EVs and PHEVs will start to take a significant share of the European car market in the next 10-15 years. Battery capacity is growing quickly, especially relative to price and size, which means cars with acceptable range for an affordable price will make EVs a relevant alternative to gasoline cars, while diesel is going to lose bigtime.

About Bart Demandt

Bart is a 36-year old Dutchman who's always had a thing for cars, the automotive industry and statistics. He’s combined these passions by writing about them on CarSalesBase.com. His daily driver is an Alfa Romeo GT 3.2 V6 which he just can't seem to say goodbye to thanks to the mesmerizing exhaust note.
You can find all his articles Here.

Comments

  1. Great analysis and commentary Bart. As you say, very interesting to see the specific numbers for these trends.

  2. Loved the article, just what I’ve ordered 😉 keep up with this kind of content, maybe the same for the US market too?

  3. Also, it’s painfull to realize the large mainstream cars are gone for good. Cars like the Citroen XM and C6, Renault Safrane, Opel Omega, and even the Fiat Croma will never be replaced proprelly (the 2000’s replacements for those where all terrible anyway…)

  4. Losange says:

    @VJAM – I’m still waiting for Dacia to fill that gap.

    Great work Bart! Very interesting article.

    In a way, the European market sort of ‘Americanised’, because crossovers/SUVs and luxury cars have become more common. It would be great to see more diversity in Europe in the next 15 years. Especially the design of expensive cars is too generic and predictable, not to say cheap.

  5. Thanks Bart, really awesome that you answered to this request with so much information and analysis!
    Do you think you would be able to update the LCV segment ? Would be really amazing.

    Cheers

    • Bart Demandt says:

      Hi d3ns,
      thanks for the compliments, much appreciated.
      As soon as I get updated figures for LCV sales, you’ll find them here of course.

  6. Guillaume says:

    There is an element that can also explain the growth of premium brands: not only they entered more segments, but also they have lowered their base offering within a given segment. There are a number of base premium models that now come with engine power/equipment levels that are lower than the mainstream equivalent ! (BMW 316i/d, 114d, Mercedes A160/d etc.) It reduces their base price and might attract mainstream buyers.

    • Bart Demandt says:

      You make a good point there, Guillaume.
      And this is a trend that’s mostly happened in Europe, as the US hasn’t received any of those base level engine options, as far as I know. Nor have any major other markets, most notably China, the biggest luxury market in the world. Which leads me to believe this could be a result of a lack of real competition in the luxury segment in Europe. In the US, Lexus is a tier 1 luxury player next to BMW and Mercedes-Benz, while Audi is just climbing up to that level, but feels the heat from Infiniti, Acura and Cadillac. In China, the German Big 3 are still the luxury leaders, but Cadillac is catching up fast and Land Rover also takes a nice chunk of the pie. But in Europe the 3 are ultra dominant, with only Volvo offering some form of competition in the SUV segments. As a result, they’ve been able to move their models downmarket with base engine options and base equipment levels, without this having a noticeable negative effect on their brand values, as long as all three did it.
      This may be an interesting topic for a future article…

Let me know what you think of this article. Thanks!

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