European Car Sales Rise 4.6%

Europe’s first-half vehicle sales rose by 4.6%, defying predictions that the market would be nearly flat, pushing monthly volumes to the highest level since June 2007, the pre-recession high point.

Every auto group, except General Motors, showed gains in year-on-year sales in the first six months. There are signs, however, that the European rebound that started in 2013 may be losing steam, including a 1.3% contraction in the UK, Europe’s second-largest market after Germany, which also trailed the average with 3.1% growth in the half, Automotive News Europe reported.

Elsewhere in Europe’s five largest markets, Italy gained 8.9% and edged into third place by vehicle sales ahead of France, which rose 3%. Fifth-place Spain increased by 7.1%. But the real winners were the newer members of the European Union: Romania surged 27%, Croatia 24%, Lithuania 20% and Bulgaria 19%.

First-half sales were bolstered by solid macroeconomic fundamentals, according to the European Central Bank.

Rising economic confidence, low interest rates and falling unemployment are expected to support domestic consumer demand, the ECB said in an optimistic forecast in late June.

“The economic recovery in the euro area is projected to continue at a faster pace than previously expected,” the bank said, with GDP expected to grow at around 1.8% a year through 2019.

“Automakers have rarely (if ever) had it so good in the region,” Exane BNP Paribas said in a June report in which it revised its 2017 sales forecast to 3.6% growth from 0.9%.

There were an additional 369,249 passenger car registrations through June, for a total of 8,461,476. Demand continued to be especially strong in Italy, which accounted for about 25% of total European growth, adding 92,943 sales, according to industry association ACEA. Of the 34 brands tracked by the association, 23 showed first-half sales growth, with 11 recording a decline.

Top gainers on a percentage basis were Alfa Romeo (+40 percent), Lada (+32%) and Jaguar (+24%). Brand winners by volume were Toyota (+50,910), Fiat (+46,651) and Mercedes-Benz (+40,387). Their combined sales growth accounted for 37% of the overall increase.