Sweden 2018. Bonus/malus system depressed the car demand

Senegal vehicle market 2016

Swedish Auto Market in 2018 fell 6.7% with 353.647 sales, interrupting the growth of previous years, with a negative second half of the year, due to bonus/malus system and WLTP introduction. The new market leader is the Volvo S/V90. 

Economic Environment

Swedish economy shrank in the third quarter according to recent figures, although this was due in large part to temporary factors. Lower vehicle sales—following tax changes which caused a front-loading of sales in the second quarter—depressed private consumption, while inventories subtracted notably from GDP. In contrast, fixed investment rose strongly, while the external sector strengthened.

The underlying picture was one of an economy still in good health, but losing momentum compared to the high growth observed in previous quarters. The economy should have rebounded in the fourth quarter, and available indicators for the period point to fairly robust activity.

Looking ahead, despite slowing from previous years, growth should be fairly strong, thanks to fixed investment and exports. However, weaker residential investment will drag on activity. Elevated household debt, meanwhile, poses a downside risk to the outlook.

Market Trend

Swedish vehicles market was on a roll having scored growing performance through recent years with consecutive records ended in the 2016 peak of 372.212 cars further hit in the 2017 with a new record of 379.240 units.

A key propellent of sales acceleration is the national automotive plan, focus on alternative vehicles to fuel, with green incentives which are supporting the development of growing Electric/Hybrid vehicles segment. However, this plan moved the Swedish government to introduce a new fiscal system for the automotive industry, called bonus/malus, which was introduced in July 2018, aiming to have incentives for low emission vehicles paid by purchasers of high emission cars.

While before the new system introduction the market accelerated ending the first half at the highest level ever and a June record with sales pull ahead to anticipate new fiscal effects, since July the market started declining. At this local revolution it was added the WLTP introduction on the 1st of September.

As a result, the 2018 ended with 353.647 sales – down 6.7% – and the outlook for the 2019 is negative.

Sales 2014Sales 2015Sales 2016Sales 2017Sales 2018'+/- 2018

Competitive Arena

The automotive industry found in Sweden one of the most relevant pioneer market in the World and despite Volvo Car is the only still opened national company (actually owned by Chinese Geely after years under the Ford Motor Company umbrella) they are still able to monopolize a relevant part of the domestic market.

Indeed, in 2018 Volvo has sold 69.943 cars (-7.4%), establishing itself as the market leader.

In second place Volkswagen with 53.469 sales (-7%) ahead of Kia with 23.037 (-0.2%), Toyota with 21.793 (-5.6%), BMW with 19.978 (-6.7%), Mercedes with 19.133 (-2.6%), Audi with 17.466 (-15.3%), Skoda with 17.162 (-0.9%), Renault with 13.367 (-16.1%) and in 10th place Nissan with 10.779 (+13.7%).

At model wise, the ranking has changed again this year, with the Volvo S/V90 on the top with 24.346 sales (+7.8%) followed by the Volkswagen Golf with 17.093 (-14.8%) and the Volvo S/V60 with 16.412 (+8.6%).

Tables with sales figures

In the tables below we report sales for all brands and top 10 models.

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