FRANKFURT (Bloomberg) -- European new-car sales rose for a fifth consecutive month in January as the start of an economic recovery in countries sharing the euro encouraged purchases of models such as the Volkswagen Golf hatchback and Audi A3 sedan.
New registrations in the EU and EFTA markets increased 5 percent from a year earlier to 967,778 vehicles, industry association ACEA said today in a statement. That compares with a 13 percent jump in December sales. The stretch of gains is the longest since a 10-month period that ended in March 2010.
Carmakers are forecasting a gradual revival in European sales in 2014 after demand last year fell to the lowest since 1995. The five biggest markets all posted gains last month.
Growth was propelled by new models at VW and Audi, as well as by Renault's Captur subcompact crossover and Dacia Sandero small hatchback and Ford's Fiesta.
"Selling rates in western Europe are heading in the right direction," said Jonathon Poskitt, an Oxford, England-based analyst at research company LMC Automotive. "All major markets were up year-on-year in January and had a reasonably good start, bearing in mind the strong finish in December."
Carlos Da Silva, an auto analyst at market research company IHS Automotive, said: "After a period where survival became the key word for many players in the industry, we are finally entering the revival phase. We are not using the words 'rebound' or 'rebirth' on purpose here. The fact is, we anticipate a quite winding road ahead."
Volkswagen Group's European sales jumped 8 percent last month. All of the main divisions at the Germany-based company, the region's biggest carmaker, reported registration gains, including growth of 8 percent at the VW nameplate, 9 percent at Audi and 10 percent at the Czech brand Skoda.
European sales at Renault Group, which ranks third to Volkswagen and PSA/Peugeot-Citroen in deliveries in the region, jumped 13 percent last month, largely because of a 38 percent surge at the low-cost Dacia brand. Renault brand's sales rose 4 percent in January.
Renault was one of only two manufacturers among the top 10 auto sellers in Europe to report full-year sales growth in 2013. Deliveries in Europe by PSA increased 7 percent last month as the Peugeot 308 compact hatchback attracted buyers.
ACEA compiles figures for the EU plus Switzerland, Norway and Iceland. The January numbers for the first time include Croatia, which became the 28th EU country in mid-2013. The carmakers' association is forecasting that auto sales in Europe will increase 2 percent this year.
Registrations in Germany, the biggest European car market, advanced 7 percent in January. Demand rose 8 percent in both the UK and Spain while increasing 3 percent in Italy and about 1 percent in France.
Gross domestic product in the euro area rose in the final three months of 2013, the third straight quarter of growth following an 18-month recession. Unemployment in the euro zone was at about 12 percent at the end of last year, with the jobless rate among young people at about 24 percent.
"We expect unemployment in the euro zone to start easing in the middle of the year to assist confidence in car buying," LMC's Poskitt said. "As the economy picks up, people will become more confident in making larger purchases and this will help drive the car market forward."
Spanish demand for cars has been boosted in recent months by a scrapping incentive program renewed by the government in October. Dealer discounts in Germany averaged 11 percent in January, the lowest level of price cutting in the past two years, according to trade publication Autohaus PulsSchlag.
"We're on the road to recovery," Allan Rushforth, chief operating officer of Hyundai Motor Co.'s European division, said in a statement. "The question, is how much of that recovery is organic and how much is the result of actions taken by governments and carmakers."
Peugeot and Renault together were the second-biggest car discounters in Germany last month, with price cuts averaging 12.1 percent, according to Autohaus PulsSchlag. Ford lowered its prices more than other competitors in Germany with a 12.3 percent reduction, the magazine said.
Ford's European sales last month rose 9 percent, the ACEA figures showed. The automaker said in January that it's increasing production of the Fiesta to meet demand in the region.
BMW brand boosted European sales 1 percent, helped by demand for the X3 SUV and the introduction of the 4-series coupe.
Deliveries in the region by Daimler fell by less than 1 percent as a small increase at the Mercedes-Benz brand was wiped out by an 11 percent drop at Smart, which is introducing two models later this year.
Mercedes is seeking sales growth with compact models that include the CLA coupe, A-class hatchback and van-like B class. The GLA compact SUV will join that lineup in March.
Among Asian auto producers, European sales gains exceeded 15 percent at Toyota Motor. and Mazda. Hyundai posted a 6 percent decline.
Fiat, Opel sales down
European sales at General Motors Co.'s Opel and Vauxhall nameplates, which have a target of jointly becoming the second-biggest auto brand in Europe, fell 8 percent last month. Fiat's group deliveries declined 2 percent, with drops of 3 percent at the namesake brand and 20 percent at the Alfa Romeo division.
LMC's Poskitt said: "We expect unemployment in the euro zone to start easing in the middle of the year to assist confidence in car buying. As the economy picks up, people will become more confident in making larger purchases and this will help drive the car market forward."