W. European 2013 sales beat forecast

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Western Europe's big year-on-year increase in new-car sales last month helped the region finish the year better than expected.

December's 12 percent sales rise to 873,926 vehicles caused the region's overall 2013 volume to decline 2 percent compared with 2012, beating a previous forecast of 3 percent from market analyst LMC Automotive.

Jonathon Poskitt, head of European sales forecasting at LMC, told Automotive News Europe: "The seasonally adjusted annualized rate (SAAR) of sales indicated by December's performance [12.3 million units] was by far the best result for any month in 2013 and only the second time that the monthly rate had gone above 12.0 million last year."

While all major markets were up year‐on‐year in December, the biggest contributors to the month's improvement were the Netherlands (up 115 percent), the UK (up 24 percent) and Spain (up 18 percent). For more results, click on the PDF, above, right.

A number of individual and not necessarily recurring factors contributed to the positive sales result in December. These include a disproportionate contribution by a single large market, the UK, to the SAAR improvement; a pull-forward into December of car sales in the Netherlands ahead of changes being introduced this January on motor taxes; and the unanticipated continuation of Spain's scrappage scheme.

Against this, Poskitt said, "the German market disappointed in 2013 as registrations fell back to under 3.0 million units. France and Italy were both also lower for the full year, with the latter market seeing selling rates continue to struggle at around 1.3 million units per year for most of the year."

Better times ahead

The big question now is whether the worst is finally behind the European car industry. Will the improvements seen in the second half of 2013 be sustained through 2014 and beyond?

Poskitt believes that on current trends, and taking into account broader macroeconomic data, the outlook for European car sales as a whole is broadly positive and that 2014 is looking increasingly likely to deliver the first annual sales increase in six years.

But the LMCA analyst remains cautious about just how big the expected 2014 improvement will be. At this early stage, he is sticking with a growth forecast of between 2 percent and 3 percent for the full year.

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