The passenger vehicle (PV) market in Western Europe began 2025 on a relatively subdued note, despite ending 2024 on a high. December 2024 saw sales exceeding 13 million units annually, but the estimated selling rate for January 2025 dropped to approximately 11.6 million units per year. This figure aligns with the average performance over the past couple of years and reflects a year-over-year decline of about 2%. Economic challenges, including potential tariff escalations due to international trade tensions and ongoing high prices, are contributing to a more cautious outlook for the PV market this year.

January's sales figures indicate that the market is still recovering from pandemic-era disruptions. The recent performance remains below pre-pandemic levels, signaling a slow return to normalcy. High pricing in Europe continues to be a significant factor, exacerbated by competitive pressures from China and potential tariff increases from the US. However, there are some positive aspects: decreasing interest rates are making vehicle financing more attractive, and manufacturers are introducing more affordable models. Yet, these factors are unlikely to significantly alter the overall pricing environment.

In Germany and the UK, the January selling rates were slightly above last year's annual results, at just under 3 million units per year. Spain was the only major market to report a positive year-over-year growth. Conversely, France faced a notable decline, with volumes dropping by 6% and a selling rate below 1.6 million units per year. Consumer caution, influenced by political instability and economic concerns, is expected to further impact France's PV sales in 2025.

The global economic climate and trade uncertainties add to the challenges facing Western Europe's PV market. While monetary easing measures provide some support, the sector is bracing for stronger headwinds. The outlook for 2025 suggests that Western Europe will lag behind other key markets in terms of recovery, especially when compared to pre-pandemic levels. Despite these hurdles, industry players remain focused on maintaining high pricing strategies while adapting to evolving market conditions.