European Car Sales Rise a Third Month on Volkswagen Gains

European new-car sales rose a third consecutive month in November, the longest period of gains in four years, as demand for autos from Volkswagen AG and Renault SA (RNO) contributed to signs that an industrywide decline is ending.

Registrations in November increased 0.9 percent from a year earlier to 975,281 vehicles, the Brussels-based European Automobile Manufacturers Association, or ACEA, said today in a statement. The growth followed gains of 4.6 percent in October and 5.5 percent in September.

The economy of the 17 nations sharing the euro will probably expand this quarter, continuing growth after a six-quarter recession in the region ended in the three months through June, according to analysts surveyed by Bloomberg. New vehicles boosting car sales in Europe include the Golf hatchback and Skoda Rapid Spaceback wagon at Volkswagen, the region’s biggest carmaker, and the Captur compact crossover at Renault.

“I hope and think” Europe’s car market has hit bottom as “it’s slowly stabilizing,” Alfredo Altavilla, chief operating officer of Italian automaker Fiat SpA (F)’s European operations, told reporters yesterday in Milan. “Talking about recovery is another story.”

The regional auto market is still on track for a sixth straight annual decline, as 11-month registrations fell 2.8 percent to 11.4 million cars. Full-year sales in 2012 dropped 7.8 percent to 12.5 million vehicles.

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The only large European carmakers to post group sales increases in the region last month were Wolfsburg, Germany-based Volkswagen and Renault. Close

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Photographer: Chris Ratcliffe/Bloomberg

The only large European carmakers to post group sales increases in the region last month were Wolfsburg, Germany-based Volkswagen and Renault.

Low Demand

Even with the three-month gain, the longest stretch of growth since the period from June 2009 to March 2010, sales remain close to the lowest since the ACEA began compiling figures in 1990, said Quynh-Nhu Huynh, the trade group’s economics and statistics director. Except for November, when figures were the third-worst for the month, “registrations recorded for every month this year were at the lowest level or second-lowest ever recorded to date,” she said in an e-mail.

Among Europe’s five biggest car markets, demand increased 15 percent last month in Spain, which ranks fifth in the region, and 7 percent in the U.K., which places second. The Spanish government revived a cash-for-clunkers incentive program in October to boost car sales. Registrations dropped in Germany, France and Italy.

Vehicle Surcharges

Smaller markets with sales growth of 20 percent or more included Greece, Portugal, the Netherlands and Lithuania. The Athens-based Association of Motor Vehicle Importers Representatives said earlier this month that corporate-fleet upgrades helped Greek delivery numbers in November. Portuguese and Dutch customers bought cars in advance of government surcharges taking effect on some vehicle purchases next year.

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A VW logo sits on the alloy wheel of a Volkswagen automobile, produced by Volkswagen AG (VW), at the 65th Frankfurt International Motor Show in Frankfurt, Germany. Close

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A VW logo sits on the alloy wheel of a Volkswagen automobile, produced by Volkswagen AG (VW), at the 65th Frankfurt International Motor Show in Frankfurt, Germany.

The only large European carmakers to post group sales increases in the region last month were Wolfsburg, Germany-based Volkswagen (VOW) and Renault.

VW’s registrations in Europe rose 3.2 percent in November, with gains of 0.8 percent at the namesake brand, 9.4 percent at the Seat marque and 18 percent at the Skoda nameplate. The Audi division, the world’s second-biggest maker of luxury vehicles, posted a 3.2 percent decline.

Renault, based in the Paris suburb of Boulogne-Billancourt, increased European sales 8.9 percent, including a 2.6 percent gain at its main brand and a 30 percent surge at the entry-level Dacia division, whose offerings include a new version of the Sandero hatchback.

German Discounting

Renault and larger French competitor PSA Peugeot Citroen (UG) were the manufacturers offering the steepest discounts in Germany, averaging 13.6 percent off the list price, according to Autohaus PulsSchlag trade magazine. Asian producers ranked a combined fourth in discounting in Germany, Europe’s biggest vehicle market, at 12.6 percent, while Volkswagen was sixth with price cuts of 11 percent.

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Employees prepare to unload new Volkswagen AG automobiles from a rail wagon at the port of Koper in Koper, Slovenia. Close

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Employees prepare to unload new Volkswagen AG automobiles from a rail wagon at the port of Koper in Koper, Slovenia.

“We are likely at the end of a very deep downturn for the industry but a recovery is very much linked to a real end of government austerity measures in Europe, which have mainly hurt Mediterranean countries,” Gian Primo Quagliano, head of automotive-research company CSP in Bologna, Italy, said by phone. “The boost at VW and Renault, especially at the Dacia brand, shows consumers are ready to buy new models and that carmakers coming out with new vehicles can benefit.”

Japanese Growth

November European car sales rose at Japanese carmakers Toyota Motor Corp. (7203), which posted a 6.9 percent gain propelled by a 31 percent jump at the Lexus premium unit; Suzuki Motor Corp., with a 16 percent increase; Mazda Motor Corp. with a 31 percent boost; and Mitsubishi Motors Corp., with a 55 percent surge. Registrations were unchanged at Nissan Motor Co. (7201), Renault’s Japanese alliance partner.

European sales increased 1.3 percent at Tata Motors Ltd. (TTMT)’s U.K.-based luxury division Jaguar Land Rover and 7.6 percent at Volvo Cars, the Swedish premium manufacturer now owned by Zhejiang Geely Holding Group Co.

Peugeot, Europe’s second-biggest carmaker, posted a 1.2 percent sales decline in the region last month as a 4.3 percent drop at the Citroen division overwhelmed a 1.3 percent gain at the Peugeot brand.

General Motors Co. (GM) sold 3.8 percent fewer cars in Europe in November, with its regional Opel and Vauxhall divisions posting a 3.1 percent decline and the Chevrolet brand reporting an 8.3 percent drop.

GM’s Strategy

GM is pulling Chevrolet out of Europe by the end of 2015 to devote resources to restoring profit at German producer Opel and U.K. unit Vauxhall, the Detroit-based carmaker said on Dec. 5. A week later, GM sold its 7 percent stake in Paris-based Peugeot as the manufacturers scaled back an alliance amid the French company’s strategy shifts, which include deepening a partnership with Chinese producer Dongfeng Motor Corp.

Fiat’s European sales fell 5.8 percent, with drops of 3.5 percent at the namesake brand, 19 percent at the Alfa Romeo division and 14 percent for Lancia and Chrysler models. The Turin-based carmaker plans to invest as much as 9 billion euros ($12.4 billion) on new models to end European losses in three years and revive its nearly empty Italian factories, two people familiar with the matter said last week.

In addition to bolstering the upscale Maserati and Alfa Romeo marques with new “Made in Italy” vehicles, the carmaker will focus the Fiat line on variants of the trendy 500 subcompact and the budget-oriented Panda small car, ditching a former best seller, said the people.

Luxury Producers

European sales at Stuttgart, Germany-based Daimler AG (DAI) declined 1.6 percent as deliveries at the Mercedes-Benz brand, the world’s third-biggest maker of luxury vehicles, dropped 3.1 percent. Munich-based Bayerische Motoren Werke AG (BMW), the global premium-car market leader, sold 7 percent fewer cars in Europe.

Sales in the region by Hyundai Motor Co. (005380), South Korea’s largest automaker, fell 7.8 percent. The Seoul-based carmaker is targeting delivery gains in Europe next year as a new version of the i10 small car adds to the effects of an industrywide revival, Allan Rushforth, head of the company’s business in the region, said a week ago, citing “a number of new opportunities” for 2014.

To contact the reporter on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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