Europe’s passenger car registrations
In the previous part, we saw that China’s vehicle sales growth rate in May dipped to the lowest level since February 2013. In this part of the series, we’ll analyze how the automobile industry is shaping up in the European Union (or EU).
Growth rate dips
The previous chart shows the year-over-year (or YoY) change in passenger car registrations in the EU. In May, registrations grew 1.3%, the lowest growth rate since November 2014. However, looking at the first five months of the current year, sales have increased by 6.8%. May marks the 21st consecutive month where vehicle registrations have increased in the EU.
The lower growth rate in May is possibly due to a lesser number of selling days. Moreover, the prevailing situation in Greece also seems to have been a spoiler in consumer sentiments.
Higher aluminum content
Aluminum content in vehicles has increased steadily over the last few years. European (VGK) auto manufacturers have been among the earliest adopters of aluminum body vehicles. Europe’s vehicle sales are therefore closely analyzed by aluminum investors. Constellium (CSTM) is a major supplier to European automobile companies.
Alcoa (AA) offers lightweighting solutions to automobile companies, who have shown an inclination towards aluminum body vehicles. Aluminum helps in lightweighting a vehicle and in increasing its fuel economy. Alcoa and RTI Metals (RTI) together make up 4.1% of the SPDR S&P Metals and Mining ETF (XME).
Meanwhile, steel companies are also doing their bit to protect their bastion. You can read more about this in our series Are Steel Companies Ready for the Aluminum Challenge?
You can also visit Market Realist’s aluminum page to stay updated on recent developments in the industry.