(Excerpt)
Registrations in the Swedish light-vehicle market have slumped
during June on the high base of comparison with June 2018.
According to data published by trade association BIL Sweden, demand
fell by 52% year on year (y/y) to 31,830 units. Overall, the
Swedish passenger car market is now down by 25.6% y/y to 167,882
units in the year to date (YTD). Registrations of light commercial
vehicles (LCVs) with a gross vehicle weight (GVW) of less than 3.5
tonnes collapsed 73% y/y to 4,530 units in June, leading to a
decline in the first half of 2019 of 44% y/y to 22,960 units.
However, sales of heavy commercial vehicles (HCVs) with a GVW of
more than 16 tonnes more than doubled in the month from 524 units
to 1,169 units in June, helping it further into positive growth
territory in the YTD with a gain of 31.9% y/y to 4,045 units.
Significance: The significant downturn in the
passenger car and LCV categories in Sweden this month is a result
of the surge during June 2018 as customers sought to avoid the
impact of a new CO2-based bonus-malus scheme. This benefits very
low emission vehicles, but heavily affects those traditional
vehicles that lack a degree of electrification. The overhang of
this pull-forward has been hitting the market for the past 12
months, compounded by the shift from NEDC to WLTP which saw
incentives on old stock and an impact on the supply of compliant
new vehicles from some OEMs. However, given the exceptionally low
base of comparison in the coming months, it is likely that we will
see some strong gains. After this rough first half of the year, BIL
Sweden has said that it expects that 335,000 passenger cars will be
sold in 2019, which will make it the sixth best year ever. IHS
Markit broadly agrees with this expectation, forecasting
registrations of 336,000 units during the year, a decline of 5%
y/y, and further declines to come in the coming few years. We also
anticipate that LCVs with a gross vehicle weight of up to 6-tonnes
will fall to around 49,800 units, a decline of 12.6% y/y.
