European car sales rise in January – MarketWatch

Posted: Tuesday, February 16, 2016

BERLIN–General Motors Corp., Ford Motor Co. and Italy’s Fiat are stealing European market share from Volkswagen AG, boosted by a fast-growing European new car market as the German auto maker remains mired in its emissions-cheating scandal.

New car sales in the European Union rose more than 6% in January, but Volkswagen, the bloc’s biggest manufacturer by sales, failed to keep pace with the industry and lost market share to its rivals as it continues to grapple with its emissions investigation.

New EU car registrations, a mirror of sales, rose to 1.06 million vehicles in January from 999,195 vehicles a year ago. The data show a marked slowdown from the previous two months but were “encouraging for the near future, as the upward market trend remains stable,” the European Automobile Manufacturers’ Association, or ACEA, said Tuesday.

On the whole, analysts said, the European auto recovery remains in tact, as large markets such as Germany overcome the euro crisis years and those countries hit by the currency problems continue to rebound from historic lows.

“The market is being driven by low fuel costs, high discounts, and low interest rates,” said Peter Fuss, a partner with Ernst & Young. “Low financing costs and a continued decline in unemployment will keep the European new car market on the growth track in 2016.”

Sales of the German car maker’s namesake Volkswagen brand, at the center of the emissions-cheating scandal, plunged nearly 4% in the 28-nation bloc, even as rivals Fiat, General Motors Co.’s Opel and Ford Motor Co. powered ahead, each reporting more than 10% growth in new car sales in the region last month.

The data show that the scandal continues to drag on European sales of the Volkswagen brand, marked by falling consumer demand and market share in a fast-growing European market.

The Volkswagen brand’s share of the EU car market fell to 11.7% in January from 12.9% in August, the last full month before U.S. environment authorities disclosed that Volkswagen had rigged some diesel engines to cheat on emissions tests.

Despite the strong overall growth in EU car markets, Volkswagen–which includes Volkswagen marque; luxury car maker Audi AG; sports car maker Porsche; Spain’s SEAT; and the Czech car maker Skoda–barely grew in January, posting a rise of 0.8% in the EU and 0.7% in core Western European markets.

The German car maker got a boost from strong growth of its Audi luxury car brand, which posted a nearly 14% increase in sales in the EU, and a 5% increase in Skoda sales, both brands driven by strong new car sales in Italy.

By contrast, new car sales of the Fiat brand in the EU rose 13.7%, while Renault sales were up 1.1% and Peugeot sales rose 3.3%. Ford Motor Co.’s European unit reported a strong 11.4% increase of new car sales in the EU, while General Motors Co.’s Opel unit reported a 12.8% increase in sales.

The January sales data also revealed a geographic shift in the European market. Italy, which suffered for years under the weight of the euro crisis, surged past France in January to become the EU’s third-largest auto market by sales after Germany and the United Kingdom. New car sales in Italy rose 17.4% in January, outpacing all of the top five European car markets.

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