By Neetha Mahadevan
FRANKFURT--New car registrations in Europe rose for the first
time in 2014 after six straight years of declines, but remained
below pre-crisis levels, as the auto industry made a fragile
recovery amid slowdown worries in some regions.
New car registrations, a proxy for sales, rose to 12.6 million
vehicles last year in the 28-nation bloc, up 5.7% from a year
earlier, according to data published Friday by the European
Automobile Manufacturers' Association.
Although car sales recovered for the first time since 2007, it
was still the third-worst year since the turn of the millennium as
growth remained patchy in most regions throughout the year, raising
doubts about the rebound's strength.
"In the coming months, the industry needs to adjust to a
slowdown in growth," said Peter Fuss, partner at Ernst &
Young's automotive group.
Car sales have so far been driven by heavy discounts at
dealerships, cheap finance and government subsidies, but were
fueled mainly by growth in the U.K. and other crisis countries that
played catch-up because of pent-up demand from the recession
years.
However, political crisis, high unemployment and fear of
stalling economies could put the brakes on growth this year, Mr.
Fuss said. He forecasts a 3% rise in sales in 2015.
In December, new car registrations rose 4.7% to 951,329
vehicles, driven by strong demand in Western European countries,
excluding France.
Registrations in Spain rose 21% in December, mainly because of
government subsidies and a rebound in private consumption, while
the U.K. shot 8.7% higher. In Germany, Europe's biggest car market,
registrations jumped 6.7%.
Still, growth in December was capped by France, where
registrations fell 6.8% due to its floundering economy. For the
year, the French new car market stagnated at around the prior
year's level.
Italy, which was worst hit by the prolonged drop in demand for
new cars in Europe after the financial crisis, posted a sales
increase of 2.4%.
"Substantial growth also posted by the new EU member states
contribute to explain last month's positive outcome," the European
Automobile Manufacturers' Association said.
Europe still lagged the China, where the car industry could face
a second straight year of slowdown this year due to its cooling
economy and rising inventories. Still, the pace there remains
stronger than Europe and the U.S.
"The European car market has indeed left the worst behind, but
it is still slow in pushing past the crisis mode," Mr. Fuss
said.
Meanwhile, car manufacturers have started forecasting moderate
growth in European sales this year.
Audi Chief Executive Rupert Stadler said at the Detroit Auto
Show that he anticipates stable but unimpressive sales growth in
Europe.
BMW expected continued strong growth in China and the U.S., its
biggest markets, but slower growth in Europe. Europe is recovering,
particularly in southern European markets, BMW's head of sales, Ian
Robertson, said.
"There are definitely some bumps in the road, but overall Europe
is in a better position," Mr. Robertson said.
Analysts have been wary but optimistic as the new car market
slowly works its way out of the crisis.
"The chances of European car sales surprising on the upside this
year are increasing," Evercore ISI analyst Arndt Ellinghorst
said.
Among individual brands, luxury car makers BMW and Daimler
posted double-digit gains, while mass market manufacturers Renault
S.A., Volkswagen AG and Ford Motor Co. also reported a rise in
December, posting gains of 3.9%, 4.2% and 4.4%, respectively. Opel
Group was the only car maker in Europe to report a drop in sales,
down 5% for the month.
William Boston
contributed to this article.
Write to Neetha Mahadevan at neetha.mahadevan@wsj.com
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