European car sales rose 7.6pct in February as economies recover
Reuters reported that European car sales rose 7.6% in February, as a gradual economic recovery in Portugal, Spain and Italy boosted demand for mass-market brands.
According to data from the Association of European Carmakers, new passenger-car registrations in the European Union and European Free Trade Association trading bloc rose for the 6th straight month to 894,730 vehicles in February from 831,371 in February a year ago.
Europe’s car industry endured a 6 year slump, with auto sales falling to a 2 decade low, as austerity-hit consumers cut back on expensive purchases. Now the market is starting to grow again.
Mr Jonathon Poskitt, head of European forecasting for LMC Automotive, said that “As the year progresses, we would expect the car market continuing to pick up because the economy is starting to move in the right direction. Selling rates in western Europe clawed their way back to mid 2012 levels.”
He said that “People are going to feel more confident to make that big ticket purchase, such as a car, that they’ve been holding off on because of the concerns over their employment prospects and their income.”
At the Geneva auto show earlier this month, executives said they were encouraged by the recovery in crisis-hit European countries, although they were worried that volatile emerging markets could overshadow the gains.
Registrations in Germany, the top car market, underperformed the regional trend, with a 4.3% increase and fell by 1.4% in Europe’s second biggest car market, France. But sales grew by double digits in some states most hit by the crisis.
Sales grew 17.8% in Spain, 40.2% in Portugal and 20.6% in Ireland, signalling that a fragile recovery in the region was gaining strength. In Italy, the region’s 4th biggest market, sales grew 8.6% as the country recovers from its longest recession in 70 years.
ISI Group said in a note that “We keep forecasting an ongoing improvement of the underlying sales trend. In addition, we keep highlighting improved vehicle pricing in tandem with better residual values and sales channel mix.”
Sales at Renault Group jumped 11.5%, boosted mainly by a 33.6% surge in registrations of its no frills Dacia brand. Ford sales were up 11.3%. Toyota Group, the world’s biggest selling car maker, posted a 14% increase and General Motors saw sales go up 12.3%, boosted by a 15.6% increase in registrations of its Opel and Vauxhall branded vehicles.
Germany’s Volkswagen group, Europe’s biggest carmaker by volume, posted a 7.2% rise, helped by a 21.5 increase at its value brand Skoda, a 15.7% jump in Seat sales and an 11.8% gain at its premium brand, Audi. VW’s performance was weighed down by a 0.8% decline in sales at its namesake brand.
French carmaker PSA lost some market share in February. Its overall sales grew 3.5%, supported by an increase in registrations of its Peugeot brand but sales of Citroen branded cars were roughly flat YoY.
The long awaited revival of the European market seems to be on track, with almost all countries and manufacturers performing better. But industry players urge caution, pointing out the gain comes from historic lows. In Italy, for example, car sales are recovering from levels last seen in the 1970s.
Mr Carlos Da Silva, an analyst with market researchers IHS Automotive, said that “Sales have effectively been growing, but discounting practices have been following a very similar path, it seems. This would tend to indicate that the overall situation remains more tense than it might appear.”
Source - Reuters