In January 2026, the Western European passenger vehicle (PV) market contracted for the first time in seven months. Sales declined 2.8% YoY to around 859k units. The seasonally adjusted selling rate fell sharply from December 2025’s peak of 13.4 mn units/year to 11.3 mn units/year in January. However, GlobalData continues to forecast modest growth as the region faces ongoing political and economic headwinds.
Across the five largest Western European markets, sales trends were broadly in line with December, with the main deviation coming from Germany. Germany’s strong momentum cooled in January, with sales falling for the first time in more than six months. Spain still delivered a solid result despite only modest growth, reflecting a high base in January 2025. France recorded a further decline as political uncertainty continued to weigh on demand. Finally, the UK and Italy posted positive performances once again, supported by incentives.
Source: GlobalData
In January 2026, the UK PV market continued its positive momentum in sales at the end of last year. Sales were up over 3% YoY totalling 144k units, while the selling rate stood at 2.18 mn units/year. This was the market’s best start to a year since January 2020. In contrast, the French PV market fell 6.5% YoY as sales totaled 107k units. Furthermore, the selling rate sank on a month-on-month (MoM) basis by 19% to 1.50 mn units/year, having picked up towards the end of last year. This decline came as the market struggled with persistently low consumer confidence, which has trended downward since 2024 amid political and economic instability. In addition, recent wage increases have largely been saved rather than spent, limiting any boost to demand.
Source: GlobalData
The Spanish PV market improved in January 2026 as sales grew just over 1% YoY to 73k units. The selling rate fell heavily, down 22% MoM to 1.02 mn units/year due to a strong year-end. Industry leaders are calling for more certainty regarding the Auto+ Plan and the extension of the 15% income tax deduction for the purchase of EVs, as the market is currently without support for EV purchases, which is discouraging some buyers from making purchases.
The German PV market fell for the first time in 7 months, as PV sales declined 6.6% YoY in January 2026. The selling rate fell 17% MoM to 2.75 mn units/year, as 194k units were recorded. Consumer sentiment fell to a near two-year low in January as geopolitical tensions and uncertain trade conditions weighed on households’ willingness to spend. Although the new €3bn EV subsidy scheme formally launched in January, it is retroactive and the application portal will not open until May 2026, potentially limiting any immediate boost to demand. Finally, the Italian PV market sustained the momentum it saw in December as sales were up over 6% YoY, totalling 142k units. The selling rate fell 5% MoM YoY to 1.59 mn units/year. January’s positive result can be attributed to the launch of newer models and the support measures provided by the MIMIT Automotive fund.