European car-buying incentives boost June sales (Roundup)

Jul 15, 2009, 9:52 GMT

Berlin - A string of government car-buying incentive schemes resulted in European car sales rising by 2.4 per cent in June, the auto industry association (ACEA) said on Wednesday.

The jump in new car registrations to 1,461,859 in June was the first increase reported by the Brussels-based ACEA in 14 months.

More than 10 European countries having introduced bonus schemes aimed at encouraging car owners to replace older cars with more energy efficient models.

The 'steep downward trend' in car sales started in May 2008, the ACEA said resulting in June last year sales plummeting by 7.9 per cent in June 2008 compared to June 2007.

Moreover, a 4.6-rise in June new registrations in western Europe's big car markets helped to compensate for a sharp 25.3 per cent drop in new registrations in Central and Eastern Europe (CEE).

Six months into the year and CEE car market has declined by 27.1 per cent.

In countries offering so-called fleet renewal schemes car sales soared in June, with new registrations in Germany racing head by 40.5 per cent year on year last month.

This resulted in Europe's biggest car market reporting a 26.1-per-cent increase during the first six months of the year compared to the same period in 2008.

The world's leading luxury carmaker, Munich-based BMW offered some hope for the car industry this week when its sales and marketing chief told the Financial Times that the carmaker was ready to increase production in the next six months.

However, the luxury carmakers appeared to miss out on the benefits of the incentive schemes, which have helped to encourage Europe's small car sector.

While BMW's sales shrank 10.9 per cent year on year in June, rival Daimler, the manufacturer of Mercedes Benz, posted a 2.7-per-cent decline.

Japan's Toyota Motor Corp's top-end Lexus brand posted a 30-per-cent slump in June compared to the same month last year with overall Toyota car registrations sliding by 4 per cent.

In the meantime, Europe's biggest carmaker, German-based Volkswagen reported a 9.5-per-cent rise on the year in June.

New car registrations in France jumped by 12.4 per cent and by 12.4 per cent in Italy, the ACEA figures showed.

France's Renault reported new-car registrations rising 3.4 per cent while rival Peugeot posted a 4.4-per-cent increase in registrations.

Fiat SpA reported an 11.7 rise year-on-year turning the Italian flagship carmaker into one of Europe's best performing car groups with sales boosted by demand for smaller cars.

But underscoring the crisis that engulfed the car industry over the last 12 months as a result of the global economic downturn, the ACEA said total new European car registrations dropped 11 per cent during the first half of 2009 compared to the same period in 2008.

Nations with economies that have taken a particularly bad hammering as a result of the global recession reported the biggest monthly drops in car sales with registrations slumping by almost 16 per cent in both Spain and the United Kingdom.

The falls in many CEE nations were even more dramatic with the Baltic state of Latvia recording the region's biggest fall of 72.6 per cent. The region's biggest car market, Poland posted a 2.5-per-cent decline.

However, both the Czech Republic and neighbouring Slovakia reported solid gains last month of 18 per cent and 57.4 per cent respectively.