European new-car sales increased at the fastest rate in over two years in September, climbing 5.5% on year to 1.19M vehicles after dropping 4.9% in August.
In January-September, sales fell 3.9% to 9.34M cars.
Last month's figures were boosted by the end of the eurozone recession, price cutting, and a Spanish government-incentive scheme that helped demand jump 29%.
"Car sales in the EU are showing signs of improvement, indicating that the worst is behind us," says Ernst & Young's Peter Fuss. "The sales, however, continue to be artificially boosted by huge discounts and self-registrations by dealers.
Registrations in the U.K. rose 12% and 3.4% in France, but dropped 1.2% in Germany and 2.9% in Italy.
European automobile market: Beware of taking on the Germans
Major automobile companies are making a big mistake in thinking they can increase profit margins by taking on German automakers (BAMXY.PK, VLKAY.PK, DDAIF.PK) in the luxury market on their home turf, argues Neil Winston of The Detroit News.
The "delusional" strategy to invest in the high-end market - instead of slashing capacity and following the lead of the successful South Korean automakers (KIMTF.PK, HYMLF.PK) in Europe - has proven disastrous to automakers such as Saab, Renault (RNSDF.PK), and Volvo (VLKAY.PK) in the past.
Peugeot (GM, PEUGF.PK) and Ford (F) are guilty of falling for the temptation to move more models into the European upscale market, while Fiat (FIATY.PK) is playing small ball on the continent.
European car sales dropped 4.9% on year in August to 686,957 units after rising 4.9% in July as new registrations fell in France, Italy and Germany last month. However, the U.K. again continued to enjoy growth, with volumes increasing 10%.
In January-August, European sales dropped 5.2%.
Peugeot (PEUGF.PK) had a particularly bad August as sales slumped 18%, with Honda (HMC) -19.6%, Fiat (FIATY.PK) -4.9%, Toyota (TM) -4%, Volkswagen (VLKAF.PK) -11%, Audi -6.4% and Ford (F) -0.9%,
The auto market in Europe is stabilizing after five years of steep declines, car executives have said, but they expect the recovery to be long and slow due to high unemployment and soft bank lending in the region.
Europe should "see the end of the tunnel next year," said Renault (RNSDF.PK) chief Carlos Ghosn, who was speaking at the Frankfurt Motor Show.
Meanwhile, Volkswagen (VLKAF.PK) aims to increase car sales to 9.5M this year from 9.3M in 2012, helping to boost shares 2.1% in Frankfurt. Brand sales dropped 1% in August to 461,600 cars, giving a year-to-date figure of 3.84M. That up 3.1% from last year.
European car sales dropped to the lowest levels since 1993 in H1, sliding 6.7% to 6.44M, the European Automobile Manufacturers' Association said, as the economic slump continued to bite. June registrations tumbled 6.3% to 1.18M, the lowest for the month since 1996. Sales in four of Europe's biggest automotive markets contracted in June, although the U.K. grew 13%. Manufacturer June breakdown: GM (GM) -9.9%, Ford (F) +6.9%, Volkswagen (VLKPF.PK) -4.4%, Daimler (DDAIF.PK) +0.6%, Peugeot (PEUGF.PK) -11%, Renault (RNSDF.PK) +0.9%, Fiat (FIATY.PK) -14%. (PR)
Renault (RNSDF.PK) and Dongfeng Motor are close to signing a deal to create a joint venture to manufacture cars in China. The partnership will involve a total investment of close to 10B yuan ($1.6B), according to sources.
The EU new-car market showed no signs of bottoming out in May as registrations dropped 5.9% to 1.04M units, the lowest level for the month since 1993. The fall followed a 1.7% gain in April. In January-May, registrations slid 6.8% to 5.07M vehicles. GM (GM) was among those to suffer the most in May with an 11.3% decline. Toyota registrations dropped 4.9% but those of Ford fell just 0.3%. (PR)
The liquidation of Better Place is a major blow to Renault (RNSDF.PK) after the French automaker hailed the electric battery-switching firm as a lynchpin of its own EV plans. Renault will move forward to tackle the infrastructure problem it faces under a new deal with Bouygues to install charging stations in key regions.