January Auto Sales Rise in the EU, Difficult Year Ahead

According to the European carmaker’s association ACEA, European passenger car sales saw a 12.9 percent increase in January, a growth driven by scrappage schemes.1,058,868 passenger cars were sold in the European Union member states in January - this represents a 12.9 percent increase as compared to the figure registered in January 2008. However, the figure can also be translated into a 17.3 percent decrease as compared to the one posted in January 2008.

Numerous governments introduce scrappage schemes last year, in order to cushion automotive sales' fall.

In Western Europe (the EU15 states), January car sales grew by 15.7 percent. The recently-introduced European Union member states (the EU10) registered a 23.5 percent fall in registrations in January.

According to ACEA, car sales in the European Union, plus the EFTA countries, grew by 13 percent. The figures for Cyprus and Malta sales could not be provided. Car sales in Germany, Europe’s biggest market, saw a 4.3 percent decrease in January, as the country’s scrappage scheme had ended in September 2009.

In spite of the positive January results, automotive producers have expressed their worries that 2010 will be a difficult year due to the fact that more and more scrappage schemes are coming to an end. A 10 percent drop in the automotive market is forecast for 2010.

Volkswagen, Europe’s largest car maker, said that 2010 will be a challenging year, regardless of the January sales increase. French carmaker PSA Peugeot-Citroen also has pessimistic forecasts for 2010. This opinion is also shared by Renault. The two French carmakers posted negative 2009 financial results.