European car sales climb 11% on economic optimism

European car sales in March rose briskly as Fiat Chrysler and Renault took advantage of a solid economy to lure more buyers.

Benefiting from extra working days due to the Easter holiday in April this year, industry-wide registrations climbed 11% to 1.94 million vehicles last month, the Brussels-based European Automobile Manufacturers’ Association, said.

Fiat and Renault gained market share at the expense of European leader Volkswagen and No 2 PSA.

Falling unemployment and 15 consecutive quarters of eurozone economic growth helped buoy consumer confidence, underpinning car demand. Even the UK, Europe’s biggest car market after Germany, has resisted a Brexit-induced slowdown, with sales in the country up 8.4% last month as buyers rushed to buy ahead of vehicle-tax changes that took effect in April. The region’s resilient car market is a contrast to the US, where vehicle sales unexpectedly declined in March.

“The latest car market result supports the positive news that we have seen from the wider economy”, in Europe, Jonathon Poskitt, an analyst with LMC Automotive in Oxford, UK, said in a report, saying that the seasonally adjusted annual sales rate in western Europe is at the highest level since early 2008. Still, sales growth will likely slow as a recovery from a two-decade low in 2013 loses steam. Annual deliveries in the coming years are expected to fall short of the 2007 peak.

LMC forecasts that western European sales will rise 2.7% in 2017, against the 7.4% gain through the first three months of the year, with the UK seeing a slowdown from the tax changes.

Germany posted an 11% gain in March. Registrations in France, in the midst of a hotly contested election, climbed 7%. In Italy, car deliveries surged 18%. The European Automobile Manufacturers’ Association, compiles numbers from the EU’s 28 member countries, excluding Malta, plus Switzerland, Norway and Iceland. Volkswagen’s European sales failed to keep pace with the overall market, rising 6.2% in March.

That caused its market share to fall to 21.4% from 22.4% a year before. The manufacturer’s diesel-related troubles have persisted more than a year into the emissions-cheating scandal.

Paris-based PSA, which agreed in March to purchase General Motors’ European division, saw its market share, including the US company’s Opel unit, narrow to 16.1% from 16.9%.

Fiat Chrysler boosted its market share to 6.8% from 6.3%. Renault wooed 9.5% of the region’s car buyers in March, up from 9.2% a year earlier.

— Bloomberg

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