European auto ABS performance in 1Q18 showed signs of deteriorating performance as delinquencies and losses are slowly, but steadily, building up, Fitch Ratings says in the ‘2Q18 Auto ABS Index – Europe’ report published today.
The three-month average (3MA) Fitch 30+ Delinquency Index and the Fitch 60+ Delinquency Index increased to 0.89% and 0.45%, respectively, from 0.8% and 0.41% in 4Q17. The increase in delinquencies continues the trend observed in the previous quarter and was predominantly driven by the UK, Swiss and Spanish sub-indices. The 3MA Annualised Loss Index increased to 0.31% in 1Q18 from 0.25% in 4Q17.
New passenger vehicle registrations in the EU grew 0.7% year-on-year (y-o-y) in 1Q18. This represents a slowdown in sales, with 2016/17 numbers showing a 3.4% increase. In 1Q18, nine of the 30 European countries posted a decline in y-o-y sales compared with just five in full-year data for 2016/17. Used car prices in the EU were up slightly from 43.9% in 4Q17 to 44.7% in 1Q18 of their initial list prices, with all countries showing a marginal improvement over the quarter.
Following on from last quarter’s focus on the UK, this report highlights Germany, and particularly the price differential between used petrol and diesel cars. On a portfolio basis, the fall in prices for used diesel cars has been more than offset by increasing prices for used petrol cars.
Auto ABS issuance volumes increased to EUR7.8 billion in 1Q18 compared with 1.4bn in 1Q17. The quarter saw 11 new issuances, including transactions not rated by Fitch, compared with four in the previous year.