European carmakers gain ground in recovering eurozone


Car sales in France, Spain and Germany picked up in October driven by a surge in demand for compact vehicles, signalling a cautious rebound spurred by an economic recovery in the eurozone.

The figures provided fresh evidence that the industry is recovering after European car sales slumped to their lowest six-months total in 20 years in the first half of 2013 as automakers suffered from the effects of record unemployment and government austerity measures in the euro zone.

New car registrations in Germany, the biggest EU auto market by sales, rose 2.3%, to 265,441 cars in October, compared with the same month last year.

France, the third-biggest EU market, advanced 2.6% to register 166,515 new cars, while new car sales in No.5 market Spain surged 34.3% to 60,301 cars, buoyed by a package of government incentives.

However in Italy, the fourth-biggest EU auto market, car sales continued their slump, falling 5.58% in October to 110,841 vehicles due to a weak economy and tight credit conditions.

Business surveys released on Monday showed factory production in the 17-nation euro zone accelerated in October, getting close to August's 26-month high. Healthy growth in Germany, Europe's biggest economy, pulled the troubled region out of its longest recession in the second quarter.

In Germany, compact cars accounted for 26.9% of new registrations, with Volkswagen up 1.9% and demand for Opel vehicles surging 12.1%, statistics from German industry association KBA show.

Of all the new cars sold in Germany last month, 62% were registered to companies, KBA said.

Volkswagen, Europe's largest auto maker by sales, had the largest market share in Germany with 23.3% of new registrations.

‘Signs of recovery’

French car sales rose for a second consecutive month in October, building on September's 3.6% year-on-year gain, the CCFA industry association said in a statement.

Paris-based Peugeot PSA posted a 4.1% domestic sales gain helped by recent models such as the 308 compact and 2008 mini-SUV.

Renault sales rose 5.8%, boosted by its similarly sized Captur model while rival Volkswagen lost some ground with sales in France down 3.6% in October.

The CCFA raised its French market outlook, predicting a 6% decline for 2013, smaller than the 8% contraction previously forecast.

"The market is picking up," said Renault's French sales chief Bernard Cambier, adding that the carmaker's domestic order backlog was up 20% year-on-year.

"It's clear that we have reached the bottom and there are already some signs of recovery," Cambier said, citing a 3.7% gain in delivery van sales in October.

Car sales in Spain were boosted by a 2,000-euro rebate programme – 1,000 coming from the government and 1,000 from the manufacturer – for buyers of new cars who turn in a used car.

Peugeot's Spanish group sales rose 52%, compared with 45% for Fiat and 28% for VW.

Hyundai and affiliate Kia continued to gain ground with combined sales increases of 5.8% in France and 47% in Spain last month. General Motors sales rose 9.4% and 31% in the respective markets.

In September, new car registrations in Europe climbed 5.5% to 1.19 million vehicles, only the third month a gain was recorded in the past two years, automotive industry association ACEA said last month.

The European car manufacturing sector was badly hit by the financial and economic crisis. Since the 2007 peak, vehicle registrations have shrunk by a quarter –down by 4.4 million vehicles, according to ACEA, the European car manufacturer’s association.

Thousands of workers across Europe were laid off, as the global economic crisis sent car sales plunging, forcing factories to close down and prompting EU member countries to adopt rescue plans to support ailing manufacturers.

>> Read: EU struggles with national plans to rescue auto sector

Europe is the world's largest producer of motor vehicles, with the car industry directly employing more than 2.3 million people and supporting more than 12 million jobs across Europe in total, about 5.5% of all employment in the EU 27.

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