Car manufacturers combed through their model programs. Because there are simply too many variants across brands – with declining sales figures.
Munich – How times can change. Until the 1990s, the automotive world had a good grip on the wealth of variants, because back then there were just about a hundred different vehicle variants. But then things took off overnight on the German market, which is as rich in image as it is in volume: within 25 years, the former 100 models had become more than 3.000 – gigantic 30 times more, spread over different models, body styles and engine options. With more and more new derivatives, new segments emerged within a short period of time.
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At the same time, competition between the individual brands has become increasingly fierce: once one manufacturer had occupied a new niche, the others had to follow suit. Hardly anyone wanted to leave a market segment to competitors. Added to this was a saturated market throughout Europe. But has this diversity also led to more sales, or are manufacturers actually selling fewer vehicles today?? Analysts at Jato Dynamics took a closer look at the numbers on this one.
Over the past 20 years, there has been a megatrend – SUVs and crossovers have become the most popular body style across nearly all vehicle classes and price regions. However, the towering vehicles with off-road vehicle looks have gained traction not only in Europe but worldwide, accounting for around 45 percent of global passenger car sales last year. In Europe, SUVs also accounted for 45 percent of total registrations this year through August. (Automotive farewell: These models will be discontinued in 2021)
Automakers sift out: New car market largely saturated
From 2000 to 2007, new passenger car registrations in Europe were 15 to 16 million units annually. From 2008, the economic and financial crisis caused the first dent; sales fell to an average of 13.7 million vehicles per year by 2016. The European market then recovered somewhat, with registrations ranging from 15.5 to 15.7 million units. Then came the Corona pandemic. Dragged down the car market – and not just in Europe. To date, the level of 20 years ago has not been surpassed again – between 1991 and 2019, total sales increased by only eleven percent. (Finally, classic cars: These models will get the H license plate in 2022)
Meanwhile, Europe's new car market, like North America's and Japan's, is largely saturated. For manufacturers, this means finding new ways to cut costs or capture new customers from other brands. With only a limited number of new customers each year, manufacturers created new segments to capture the attention of their clientele. The SUV wave that started in the USA in the late 1990s came just at the right time. At a rapid pace, SUVs were gaining ground and quickly becoming a popular alternative to the traditional hatchbacks, station wagons and vans that dominated Europe's roads for decades. Suvs not only enabled manufacturers to expand their model range, but also to charge more for vehicles that are technically largely identical to their hatchback counterparts. (Affordable new cars: Five cars for under 30.000 euros)
Automakers seven out: SUV welcome source of revenue
There is no end to the success: Customers are still willing to pay more for an SUV than for a car with a classic body style. For manufacturers who have struggled to meet their targets over the past decade, SUVs are a welcome source of revenue. On the other hand, the larger crossovers are causing higher CO2 emissions. The popularity of pseudo-SUVs comes at the expense of traditional segments. The only astonishing thing is that although SUVs have made manufacturers' profits bubble up, this has had almost no impact on overall registrations. Not only have they been stagnant for years, but total sales of the seven European car brands that offer SUVs plummeted dramatically between 2001 and 2021 in both the B and C segments. (New Cars 2022: These Electric Models Roll Out to Dealers)
In 2001, the Peugeot 206 was the best-selling model in Europe with almost 443.000 units, the best-selling model in the B segment in Europe. It was the only Peugeot model in the small car class. In 2016, the Peugeot 2008 was launched as the SUV counterpart to the 208 -. Immediately became the second best-selling SUV in the B-segment in Europe. But so far this year Peugeot has only 287 of the two models together.000 units sold, two-thirds of 206 sales in 2001. However, this is not an isolated case: other volume manufacturers, such as Opel, Renault or Ford, are also struggling with the same problems.
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Automakers sifting out: Broad engine portfolios will disappear
The same trend can also be observed in the compact class (C segment). In 2001, the VW Golf stood at 466.000 units at the top of the segment and the entire market. Five years later, the bestseller was also available as a Golf Plus large sedan. And the registrations increased to 474.000 units. Between 2011 and 2016, total volume actually increased thanks to the newly launched Tiguan. But this year, Volkswagen's Golf, Golf Sportsvan, Tiguan and Tiguan Allspace derivatives have just reached a combined total of 314.300 units sold. 390.600 are when ID.3 and ID.4 added.
That sits: A single model thus found more customers in 2001 than six models in 2021. And there is currently not much to suggest that this will change in the short term. The number of vehicle variants will decrease in the coming years. One or the other recently closed gap in the model program must be opened, because most manufacturers will offer vehicles with combustion engine and electric drive in parallel in the coming years. The growing trend of electric cars will make life difficult for affordable small cars in particular. The one or other sedan is replaced by a crossover as well as the station wagon. In addition, the broad engine portfolios, diesel drives and vehicles with manual transmission are increasingly disappearing.