European car sales growth accelerated to the fastest gain in 15 months in March as the region’s improving economy fueled demand for vehicles made by the likes of Volkswagen AG and Renault SA.
Registrations climbed 11 percent from a year earlier to 1.65 million autos, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said in a statement Thursday. First-quarter deliveries rose 8.5 percent to 3.64 million cars as a recovery from a two-decade low in 2013 picked up momentum. The March increase was the biggest since a 13 percent jump in December 2013.
Robust demand is a sign of the brightening outlook in the region, even as the euro falls and Greece’s funding struggles continue. Executive and consumer confidence in the countries using the euro rose to a 3 1/2-year high last month, adding to signs that an economic recovery is stabilizing.
Spain reported the strongest car-sales gain among Europe’s five biggest auto markets, as a government program encouraging trade-ins of old vehicles for scrap propelled a 41 percent surge. In the U.K., registrations rose 6 percent to the highest level this century. Germany, Europe’s largest economy, posted a 9 percent auto-sales gain, while demand jumped 9.3 percent in France and 15 percent in Italy, the ACEA said.
“The figures are much better than expected for markets such as France and Germany, where there’s no scrapping program in place,” Georges Dieng, a Paris-based analyst at Natixis Securities, said by phone. “This reflects the overall, improving health of the economy,” with low interest rates and European Central Bank stimulus policies contributing to “a favorable environment.”
The industry group compiles statistics from the 28 European Union countries, excluding Malta, as well as Switzerland, Norway and Iceland. The western European market this year may amount to 12.84 million cars, the highest figure since 2010, according to LMC Automotive research company.
Steeper discounts are helping to encourage sales. Rebates by German car dealers widened in March to an average 12.2 percent off the list price from 11.6 percent a year earlier, according to trade publication Autohaus PulsSchlag. The best deals were available on Fiat models, with average rebates of 14.4 percent, while luxury-car maker Mercedes-Benz bucked the trend and reduced incentives to 8.7 percent from 10.4 percent a year ago.
Volkswagen AG, Europe’s biggest carmaker, increased sales in the region by 10 percent last month, as the VW Passat sedan, Skoda Fabia wagon and Porsche Macan compact sport-utility vehicle won customers, even as a potentially disruptive power struggle among top management burdened the German company.
Renault, the French manufacturer that ranks third in European auto sales, posted an 11 percent increase in the region, helped by the Captur compact SUV. Italian-U.S. carmaker Fiat Chrysler Automobiles NV sold 16 percent more cars as demand tripled at the Jeep SUV division.
Daimler AG’s Mercedes topped the three main German premium-car manufacturers’ European performance last month with a 17 percent sales jump. Volkswagen’s Audi division posted a 6.8 percent increase, while BMW AG’s namesake brand sold 4.5 percent more cars. Daimler’s group registrations rose 20 percent as a new lineup at the Smart city-car division led to a 57 percent gain.
Asian carmakers posting above-average European sales growth in March included Japanese manufacturers Toyota Motor Corp., Nissan Motor Co., Mazda Motor Corp. and Mitsubishi Motors Corp. and South Korea’s Hyundai Motor Co. Jaguar Land Rover, the British high-end carmaker owned by India’s Tata Motors Ltd., sold 19 percent more cars in the region.