Latest Q3 European new car market study: Lost in Transition
According to the latest Schmidt Automotive Research Q3 European New Passenger Car Market Study, published November 2026, European manufacturers see their domestic share of the regional market dip to a historically low level: 62% in Q3. A more resilient Western European market remains on track to surpass 12 million units for the first time since pre-COVID 2019 this year.
However, look below the surface and weak pricing, driven by new market entrants and potentially causing contagion across the entire market, is driving a large proportion of that growth.
A declining Chinese market in 2026 is pushing manufacturers exposed there to focus on Europe and the Global South to maintain volumes, with Chinese OEMs increasingly front-loading the market ahead of the likely implementation of EU quotas on hybrids.
The proposed deal would start at 350,000 units per year, rising by 6% each year over four years.
Meanwhile, a market increasingly driven by electric-vehicle demand, as a consequence of pump-price inflation from the Iran crisis, is dramatically reshaping the region's dynamics.
Manufacturers such as the Volkswagen Group are now witnessing BEV incoming orders account for 40% of the current order book. While this helps meet regulatory CO2 fleet-emissions compliance and ZEV mandate targets, BEVs remain margin-dilutive for many, with Volkswagen Group confirming their contribution margins remain at just 70-80% of ICE margins, which continues to weigh on already strained underlying profit margins.
On an annualised basis through the end of September, 12.33 million new passenger cars were registered between October 2025 and September 2026.
However, despite the positive tone, after five years in a volume corridor of 10-12 million units, volumes still trail pre- COVID levels by 2 million units in what was traditionally an above-14-million annual market.
The opening 9-months of this year, meanwhile, saw volumes reach 9.39 million, a 6.3% y/y increase, with the last two quarters posting above 7% y/y growth.
However, the most recent quarter was boosted by EV purchase subsidies returning in France and Germany, compared with a low baseline last year. Meanwhile, the UK saw volumes increase 12.2% y/y, supported by Chinese volumes offsetting a more fiscally-protected EU region.
Chinese manufacturers are increasingly gaining momentum there through agressive pricing policies, particularly from a financing perspective, avoiding anti-subsidy tariffs on BEVs in a more brand-agnostic environment than other major markets, and consequently achieved a 23% share of the UK new car market in the most recent quarter, which is expected to be reflected in achieving 20% by the end of the year (18.4% YTD).
This is just a small extract from one of our full studies which are available below.
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Scope: Western Europe's 18 Markets: EU Member States prior to the 2004 enlargement, plus EFTA markets Norway, Switzerland, Iceland, plus UK – accounting for 90% of the enlarged European region.
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