European car sales advanced a seventh consecutive month as new models to replace aging vehicles and an economic rebound in the U.K. boosted demand at Renault SA (RNO), Ford Motor Co. (F:US) and PSA Peugeot Citroen. (UG)
Registrations in March jumped 10 percent to 1.49 million vehicles, the Brussels-based European Automobile Manufacturer’s Association, or ACEA, said today. The gain was led by an 18 percent surge in the U.K., which accounted for one-third of the region’s deliveries.
Demand is rising as consumer confidence in Europe strengthens and the sovereign-debt crisis recedes in Spain, Greece and Portugal. Sales increased 29 percent in March at Renault, 14 percent at Ford and 11 percent at Peugeot. U.K. registrations climbed a 25th consecutive month in March and beat figures in Germany, the region’s biggest market.
“The numbers for the first quarter and in particular for March are superb,” Hans-Peter Wodniok, an analyst at Fairesearch GmbH in Kronberg, Germany, said by phone. The U.K. “is really the driving force when you look at the other large European markets.”
Renault, Europe’s third-biggest carmaker by deliveries, rose as much as 2.3 percent and was trading up 1.8 percent at 73.30 euros as of 10:38 a.m. in Paris. Peugeot stock gained 2 percent to 13.43 euros.
U.K. Jump
The industrywide gain in March was the biggest since December. In the U.K., which overtook France to become Europe’s second-biggest auto market in 2012, sales amounted to 464,824 cars amid a semiannual changeover of license-plate numbers that indicate a vehicle’s age and after wage growth accelerated and the unemployment rate declined. The gain compared with a 5.4 percent increase in Germany to 296,408 cars.
“These British guys seem to be mad about new cars,” Wodniok said.
The International Monetary Fund raised its forecast for the U.K. on April 8, predicting Britain will have the fastest growth among developed nations. The economy will expand 2.9 percent this year, outpacing the 1.2 percent increase predicted for the countries using the euro, according to the Washington-based IMF.
Dacia Surge
European sales growth at Renault, based in the Paris suburb of Boulogne-Billancourt, was propelled by a 51 percent surge at the low-cost Dacia division, which has revamped its Duster sport-utility vehicle and Sandero hatchback. The Captur crossover, introduced about a year ago, helped Renault-brand sales rise 23 percent.
“There is a big recovery coming in Europe,” Chief Executive Officer Carlos Ghosn said in an interview on April 15 at the opening of a plant by Japanese automotive partner Nissan Motor Co. (7201) in Resende, Brazil.
The Peugeot brand posted a 13 percent jump in European sales, while demand at the Citroen marque rose 8.5 percent. The Paris-based automaker, the second-largest in the region, is reorganizing to restore profit after two years of losses. The company said this month that it will add production of the Peugeot 2008 compact SUV as the model garnered 120,000 orders.
Chief Executive Officer Carlos Tavares outlined plans this week to reduce the group’s product line-up by almost half while the Citroen unit’s DS badge will be upgraded into a separate premium brand. Peugeot is targeting automotive-unit operating profit at 2 percent of sales by 2018, with the margin widening to 5 percent in the 2019-2023 period, he said.
VW’s Lag
European sales by Wolfsburg, Germany-based Volkswagen, the region’s biggest carmaker, increased 8.4 percent, lagging behind the industrywide gain as demand rose 5 percent at the namesake brand and 7.6 percent at the Audi luxury division.
“The VW brand performed slightly weaker than we expected,” Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG, said by phone. A changeover of the Passat model set for later in 2014 and a less favorable geographical mix within Europe contributed to the slow growth, with VW’s home market expanding less than other countries, he said.
Detroit-based General Motors Co. (GM:US)’s deliveries in the region increased 7 percent because of a 15 percent increase at the Opel and Vauxhall brands. Demand at Turin, Italy-based Fiat SpA (F) gained 4.2 percent, helped by a 32 percent surge at the Jeep SUV brand.
Opel is likely to expand deliveries in the region faster than competitors this year as models such as the Adam city car attract buyers new to the brand, Karl-Thomas Neumann, head of the Ruesselsheim, Germany-based division, said in early March.
– Bloomberg
