Europe’s car sales drive on

In 2014, European car sales rose for the first time in seven years as buyers replaced aging vehicles with low-cost ones. The market’s revival from a two-decade low is set to continue in 2015.

Registrations rose 5.4%, to 13m cars, according to figures from the European Automobile Manufacturers’ Association (ACEA). Gains were pushed by ‘discount brands’ such as Renault’s Dacia and VW’s Seat and Skoda. Amid signs that economic expansion in euro countries was stalling, car-makers widened price cuts in late 2014.

“The European car market has lifted from the lows, but it’s only slowly recovering from crisis levels,” Peter Fuss, a partner at consulting company Ernst & Young’s German unit, said. “The main drivers for last year’s gains were high discounts, cheap financing, government-subsidised schemes for buying new cars and a number of new models.”

December sales were up 4.9% on a year earlier, at 997,238 vehicles. Among the top 10 car-makers selling in Europe, BMW, Fiat Chrysler, Mercedes and Nissan exceeded that growth rate. Europe’s five largest car markets expanded last year: by 18% in Spain, 9.3% in the UK, 4.2% in Italy, 2.9% in Germany, and 0.3% in France. Car sales in Ireland were up 30%.

Growth estimates for 2015 are mixed. VDA, the German car-maker association, predicted in December that western European sales gains would slow by between 0.5% and 2%, as dealers in Germany, France and Italy post only modest increases.

In contrast, Arndt Ellinghorst, an analyst at Evercore ISI, in London, said sales increases may “surprise on the upside” at as much as 5%, as declining oil prices and a drop in the euro (which help exports) provide a “massive boost” to Europe’s economy.

Renault sold 13% more cars in Europe in 2014, as the Duster sport-utility vehicle and Sandero hatchback boosted Dacia registrations 23%, and a new version of the Renault Captur urban crossover led to 9.1% growth.

Sales at Volkswagen, the region’s biggest carmaker, gained 7% last year; with Skoda’s Rapid and Yeti sport-utility vehicle, and Seat’s revamped Leon boosting demand at each firm by 14%. VW sold 4.3% more cars, while Audi, the world’s second-biggest maker of luxury cars, had a 4.5% increase. Ford sales jumped 5.2%, as demand increased for the Fiesta sub-compact, Focus hatchback, and C-Max and Grand C-Max vans. General Motors’s European brands, Opel and Vauxhall, sold 7.3% more, helped by the Adam city car and Mokka compact SUV. BMW increased sales by 4.9%; Peugeot by 3.7%.


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