Ford, Renault, Opel and PSA gain as market rebound continues

European sales rise 4% in April

Ford, Renault, Opel and PSA gain as market rebound continues

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FRANKFURT -- New-car registrations in Europe rose 4 percent in April with mass-market automakers Renault, Ford, Opel and PSA showing stronger growth than premium brands.

Registrations in the EU and EFTA markets increased to 1.13 million vehicles from 1.08 million a year earlier, industry association ACEA said today in a statement. Four-month sales gained 7 percent to 4.48 million.

Last month's increase is the eighth consecutive month of higher year-on-year demand, with sales boosted by discounts offered by automakers and by car owners renewing aging vehicles.

Growth in April was pushed by gains of 16 percent at Renault, 9 percent at Ford, 7 percent at Opel/Vauxhall and 5 percent at PSA/Peugeot-Citroen, though the industry increase was held back by a decline at the namesake brand of market leader Volkswagen.

Renault’s no-frills Dacia brand, which has revamped the Duster SUV and Sandero hatchback, posted a 34 percent surge. Renault brand, which has attracted buyers with the Captur crossover brought out a year ago, sold 9 percent more autos.

European sales at the Peugeot marque rose 6 percent, with demand at the Citroen division increasing 4 percent.

Group sales by Volkswagen rose 4 percent. Jumps of 22 percent at Skoda, which was boosted by the new Octavia, and 6 percent at Seat, more than offset a 1 percent slide at the VW marque.

VW brand is revising its mid-sized Passat sedan later this year. The brand's sales suffered because of a lack of new product and a weak German home market.

VW's Audi luxury division posted a 1 percent sales gain.

FULL NUMBERS
Download PDF, above right, for April and 4-month European sales by automaker, brand and country.

General Motors' Opel/Vauxhall division sold 7 percent more cars in Europe last month. GM’s group sales in Europe fell 6 percent as the Chevrolet brand, which is being withdrawn from the region, scaled back deliveries. Chevrolet sales plunged 74 percent.

'Incredibly unrewarding'

Fiat’s European sales rose 2 percent in April, with the namesake brand’s deliveries increasing 3 percent and demand at the Jeep SUV division surging 52 percent. Alfa Romeo sales were down 8 percent and Lancia declined 18 percent.

Part of Fiat’s strategy shift as it merges with Chrysler Group will be to drop out of volume carmaking in Europe, "an incredibly unrewarding market segment which has historically produced no margins and destroyed capital," to focus on upscale SUVs, sedans and sports cars, CEO Sergio Marchionne said earlier this month. "I am still negative on Europe," he added.

Among Asian automakers, Nissan's sales surged 21 percent, boosted by a new generation of the Qashqai crossover, its top seller in Europe. Kia sales were up 4 percent while Toyota brand's volume grew 2 percent. Honda posted an 8 percent drop, and Hyundai brand was down 4 percent.

BMW, Mercedes gain

BMW sold 1 percent more autos in Europe as a 3 percent gain at the namesake brand compensated for an 11 percent drop at the Mini small-car marque, which is updating its lineup.

Daimler’s Mercedes-Benz division posted a 2 percent increase. European demand at Daimler’s Smart citycar unit, which is renewing its ForTwo and adding a four-seat model, fell 15 percent.

Discounts stabilizing

Analysts said discounts, government incentives and cut-price sales of unused vehicles marketed as "nearly new" continue to prop up sales. "Our most recent April channel checks suggest a stabilization of discounts in Europe on a high level," analysts at JP Morgan said in a note on Wednesday.

Last month, confidential research seen by Reuters showed that average retail incentives had jumped 12 percent to almost 2,750 euros ($3,800) per vehicle in the five biggest European markets, with discounting outpacing sales growth.

The fact that discounts had not risen from March levels may be an indication that the price war in Europe is not getting any worse, lending credence to the notion that prices have stabilized, JP Morgan said.

Tim Urquhart, an analyst at IHS Automotive in London, said: "We shouldn’t take April figures as a general trend in Europe. The slowdown was concentrated just in some few markets." However, IHS still expects "a sensible and sustainable increase of deliveries in Europe this year."

Automaker executives are predicting industrywide delivery growth of 2 percent to 3 percent for 2014, following a six-year contraction to a two-decade low in 2013.

Spanish surge

Germany, Europe’s largest market, was the only country among the top five in the region to post a decline last month, with a 4 percent drop as the Easter holiday hit sales. Demand surged 29 percent in Spain and rose 8 percent in the UK. Sales in France rose 6 percent and 2 percent in Italy.

Reuters and Bloomberg contributed to this report

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