Not what you'd expect to see in the KPMG Luxembourg car park. Luxury car dealers displayed their vehicles outside the company's building during the conference on Tuesday 2 April
Cars are here to stay on Luxembourg’s roads, research on the local market shows. But, that doesn’t mean things aren’t changing in terms of the environment and types of cars coming to the market.
Here are 10 things Delano gleaned from the KPMG Luxembourg automotive conference on Tuesday.
Private car ownership rates are growing faster
Luxembourg recorded a whopping 415,000 cars on the road in 2018, with a record-breaking 52,811 new registrations. “It means every day there are 33 new cars on the road, think about it next time you’re in a traffic jam,” KPMG senior manager Bruno Magal said on Tuesday. He explained that it required 12 years to go from 300,000 to 400,000 cars, but to reach the next milestone of 500,000, will take just eight years at the current rate.
More cars, but cleaner cars
Compared to neighbouring countries, Luxembourg has the highest car ownership per capita at 740 per 1,000 inhabitants (2016). The impact of this growing traffic on the environment is offset to a certain extent by the fact that Luxembourg has the youngest car fleet in Europe and younger cars tend to be cleaner. The average age of a car on Luxembourg’s roads is 6.3 years, compared to 11 in Europe.
Company cars remain standard
In 2018, company cars made up 20.6% of the country’s market share, equivalent to 86,481 cars on the road. Analysing the results of the KPMG remuneration survey, Magal said company cars remain a “standard in remuneration packages”. They are offered to 86% of general managers, 82% of middle managers and 27% of staff.
Company car budgets
Eight out of ten company cars were held through operational leasing schemes, compared with 6% through financial leasing only, and 15% combining both. Companies responding to the remuneration survey gave an overview of the company car budgets, with general managers receiving €700-€4,200 per month, heads of business €700-€3,100 and department managers €500-€1,600.
The top six most-popular brands in Luxembourg remained unchanged in 2018, with VW dominating the market at 14.1%, followed by BMW (10.1%), Audi (8.6%), Mercedes (8.1%), Renault (5.9%), Peugeot (5.3%), Ford (4.5%), Citroen (3.9%), Opel (3.6%) and Hyundai (3.2%). Porsche sales have rocketed in recent years and this brand is expected to become among the 15 most-popular brands in the country by 2021.
Among the luxury brands, Tesla retained the top spot with 86 units registered in 2018, though sales halved (from 155 in 2017), followed by Ferrari (76), Bentley (38), Aston Martin (37) and Lamborghini (42). Incidentally, 45% of the 288 new luxury cars registered in 2018 were company cars.
Diesel is on the out
Luxembourg’s efforts to discourage the purchase of diesel vehicles coupled with the dieselgate emissions cheating scandal have resulted in a loss of market share for diesel vehicles in Luxembourg. The share of these types of engines fell by 5% to 58.95% in 2018. Petrol gained that 5%, securing a share of 39.17%.
Alternative fuels gaining traction
1.87% of vehicles are run on alternative fuels like electric, hybrid or hydrogen. Hybrids account for 1.5% of the overall market, equivalent to 6,200 cars on the road. The rate of take-up of hybrids has doubled in Luxembourg over the past two years. This was attributed to the installation of electric charging stations in stages (800 by 2021), lower road tax, subsidies and other in-kind benefits. The Global Automotive Executive survey found that price remained the main obstacle for companies and consumers to buy full electric vehicles. KPMG partner Louis Thomas suggested Luxembourg could do more to boost EV take-up among employees by creating incentives in addition to the existing €5,000 subsidy.
CO2 emissions low but far off target
At 126 g/km, Luxembourg’s average CO2 emissions per new car are the lowest in the area. But the country is not expected to achieve the EU recommendation of 95 g/km by 2021, or the 2030 target of 67 g/km. Starting in 2019, manufacturers pay a €95 penalty for each gram of CO2 per kilometer exceeded for each car registered. Experts on Tuesday were not convinced this would be enough to tip the balance, however.
My next car
The Global Automotive Executive survey found that a third of respondents planned to buy a hybrid in the next five years, 22% an internal combustion engine vehicle, 15% a plug-in hybrid and 12% a fuel cell. A third of executives said they expected autonomous driving to be part of their life in 2030, while 4% don’t think it will ever happen.