Europe car sales end losing streak

Europe’s ailing car market ended a streak of 18 straight months of falling sales, though a number of one-off factors suggested that a sustained recovery will be harder to achieve.

A pick-up in Germany and Spain in addition to continued robust demand in Britain delivered a 1.8 per cent increase in new car registrations last month, to 1.08 million vehicles.

However, the figures published by automotive industry association ACEA yesterday were flattered by two extra sales days in many European markets after Easter holidays fell in March rather than April, with last year’s weak April also helping the year-on-year comparison.

Demand for new cars in recession-hit Europe fell to a 17-year low last year as eurozone unemployment reached record highs, credit dried up and households focused on repaying debt.

Despite last month’s upturn, the ACEA pointed out that it was still the third-lowest level of new registrations for the month of April.

“It’s a bit like the ‘dead cat bounce’ because car sales have been so low for so long they may have reached their low point, but I’m wary about calling this a turning point because consumers in most of the eurozone remain under pressure,” said Howard Archer, chief European economist at consultancy IHS.

“Germany is the best market to see future upticks because the fundamentals for consumers there, such as high employment and wage growth, are better than elsewhere.”

Monthly sales by Volkswagen, the world’s third-largest carmaker, rose 7.2 per cent in April, having grown at their slowest rate in more than three years a month earlier. GM’s Opel brand, meanwhile, achieved a 2.1 per cent gain.

Yet, without a near-15 per cent boom in Britain, which enjoyed its best April sales in five years, Europe’s car market would have suffered a slight contraction last month.

For the first four months of this year, volumes have declined seven per cent compared with the same period last year.

“We expect continued uncertainty through the summer season, especially as Germany heads towards September elections,” said Allan Rushforth, European operating officer for Hyundai.

French and Italian mass-market brands continued to pay a high price for their heavy reliance on car buyers in southern Europe.

Peugeot sales fell 7.5 per cent and Citroen dropped nearly 13 per cent. Renault managed to escape with only a 1.3 per cent drop last month. Fiat’s eponymous brand notched a 4 per cent drop, while sales for its sporty Alfa Romeo marque collapsed by a third. (Reuters)