The Autofestival season sees curious people in Luxembourg making their way to car garages, filled with questions and hoping to find answers. Statistically, 30% to 35% of new vehicles in Luxembourg are bought at the start of the year as 90 garages across the country are offering deals until during this period.
According to Bernd Fuhrmann, manager of a car garage: “People tend to be somewhat confused about what they should choose, because the choice has never been as wide as it is today.” However, Fuhrmann believes there is something out there for everybody, even people looking for an electric car without the means of charging it.
In Luxembourg, the most sought after cars remain electric vehicles, making up almost half of all offers. In the long run, people won’t really have much of a choice here, says Yves Binsfeld, another car garage owner. “People are forced to buy more and more electric cars. And we have to sell them because the European Commission obliges manufacturers to meet different emission standards.” The final choice however still depends on personal needs and means.
Car prices have generally gone up, according to Binsfeld, emphasising that this is also due to the new technologies that limit exhaust emissions and improve safety standards. Binsfeld explained that the cars on offer today are much safer than the cars that were available two or three years ago.
Luxembourgish car dealerships have expanded their range of brands on offer. After Japanese and South Korean brands, Chinese brands are slowly but surely entering the European market. “We are in the midst of a big change. The fact that the brands that usually do very well are perhaps not doing as well today could mean that those brands are finding it harder to adjust to a fast-changing market,” explains Philippe Mersch, President of the Federation of Automobile Distributors and Mobility (Fedamo).
According to Mersch, this is however not due to any major changes in various geopolitical interdependencies. Today, a European brand could easily build different models in China and a Chinese brand does not just produce in China. The market is already extremely globalised.
From a bird’s eye view, hybrid cars took control of the European car market in 2024, while electrics lost ground, according to figures published by the European Automobile Manufacturers Association (ACEA).
The market share of electric cars in Europe fell for the first time since the market took off in 2020, to 13.6% for the year (but 15.9% in December).
Electric vehicle sales continued to grow in Belgium, Denmark and the Netherlands, and could rebound in 2025 with the arrival of less expensive models. S&P, whose forecasts are a benchmark in the sector, predicts growth in electric vehicle production of around 38% by 2025.
Among the various brands, electric car pioneer Tesla saw its sales fall by 13.1% in the EU, while Volvo (+28%) made gains on the launch of their new electric models.
European regulations on CO2 emissions have become significantly stricter since January 1, 2025, and “require an increase of more than 30% in electric vehicle sales”, Bank of America analysts noted.
The analysts continued that although the EU is likely to postpone this deadline, with several manufacturers criticising them, this will not happen soon enough in 2025. “This means that carmakers must prepare to comply.”
Electric cars have been overtaken by the explosion of hybrids. Being dually equipped with a gasoline engine and a small electric battery that recharges as you drive, hybrids are seen as more versatile and less expensive. This has enabled hybrid models to conquer 30.9% of the market (33.1% in December).
Hybrids are steadily biting away at the market share of gasoline-powered models (-4.8%, 33.3% market share over the year), and even doubled them over the last four months of 2024. Diesel continued to plummet (-11.4%), except in Eastern European countries.
Taking all types of cars together, the automotive market remained stable over the year (+0.8%), with 10.6 million new cars registered in the EU, but this is still a long way from pre-Covid numbers.
France, Germany, Italy and Belgium put fewer cars on the road in 2024, while Spain, Portugal and Poland reported higher sales. Market leader Volkswagen grew by 3.2%, driven in particular by its Skoda brand, while Fiat and Opel saw sales plunge by their parent company Stellantis (-7.2%). The group was overtaken by Renault-Dacia in December.
However, with increasingly more Chinese models arriving on the European market, 2025 could prove to be a bleak year for the European automotive industry. As described by UBS analyst Patrick Hummel, Europe is facing a “perfect storm,” between pressure on prices, stricter CO2 standards, hesitant buyers and the relentless arrival of new brands.
