European car sales up for first time in seven years

European car sales in 2014 rose for the first time in seven years on demand for low-cost motors from Renault and Volkswagen.

The gradual revival from a two- decade low is set to continue in 2015 as buyers replace aging vehicles.

Registrations rose 5.4 per cent to 13 million cars, the European Automobile Manufacturers' Association, or ACEA, said on Friday. That was at the upper end of industry estimates that ranged from PSA Peugeot Citroen chief executive Carlos Tavares's prediction of a 2 per cent increase to Renault CEO Carlos Ghosn's 6 per cent forecast.

Gains last year were pushed by Renault's discount Dacia brand and VW's value-oriented Seat and Skoda marques.

Amid signs that economic expansion in euro countries was stalling, carmakers widened price cuts in the final months last year to stimulate demand.

December sales rose 4.9 per cent from a year earlier to 997,238 vehicles. Among the top 10 carmakers selling vehicles in Europe, BMW, Fiat Chrysler, Daimler and Nissan exceeded that growth rate.

Top Markets

All five of Europe’s largest car markets expanded last year, with increases of 18 per cent in Spain, 9.3 per cent in the UK, 4.2 per cent in Italy, 2.9 per cent in Germany and 0.3 per cent in France.

The ACEA's figures comprise statistics from the 28 European Union countries, excluding Malta, as well as Switzerland, Norway and Iceland.

December was the 16th consecutive month of growth, the longest stretch of gains since the association began compiling registration figures in 1990.

The German carmaker association VDA expects western European sales gains in 2015 to slow by half to 2 per cent as Germany, France and Italy are set for only modest increases and volume in the UK returns to levels from before the global recession that began in 2008.

Russian Contraction

Sales gains in the main part of Europe next year would contrast with an expected auto-market contraction in Russia, where the economy is sliding into a recession. Deliveries in the country fell 10 per cent to 2.49 million vehicles last year, and the decline this year may accelerate to 24 per cent, the Association of European Businesses in Russia estimated.

Renault sold 13 per cent more cars in Europe in 2014 as the Duster sport- utility vehicle and Sandero hatchback helped Dacia boost registrations 23 per cent and a new version of the Captur urban crossover led to 9.1 per cent growth at the namesake brand.

European sales at Volkswagen, the region’s biggest carmaker, gained 7 per cent last year, with Skoda’s Rapid sedan and wagon and Yeti sport-utility vehicle and a revamped Leon vehicle line at Seat boosting demand at both nameplates by 14 per cent.

The main VW brand sold 4.3 per cent more cars, while Audi, the world's second-biggest maker of luxury cars, reported a 4.5 per cent increase.

Peugeot’s Gains

Peugeot, Europe’s second-biggest carmaker, posted a 3.7 per cent sales increase in the region. Growth was bolstered by the Peugeot nameplate’s 308 hatchback and 2008 and 3008 crossovers and the Citroen marque’s C4 Cactus SUV.

General Motors. 's European brands Opel and Vauxhall sold 7.3 per cent more cars in the region, helped by the Adam city car and Mokka compact SUV. Group registrations fell 4.6 per cent as GM withdrew the Chevrolet nameplate from the market.

European group sales at BMW increased 4.9 per cent. The namesake brand, the world’s largest luxury-car manufacturer, won 5.5 per cent more buyers as it added the 4- Series coupe, i8 plug-in hybrid sports car and van-like 2-Series Active Tourer to its line-up. The Mini division, which offered an updated hatchback toward the end of the year, posted a 2.2 per cent increase.

Bloomberg