European car sales rose 4 percent in June as an economic recovery in southern Europe, new product launches and retail incentives boosted demand for mass-market brands.
Registrations in the EU and EFTA markets increased to 1.23 million vehicles from 1.18 million a year earlier, ACEA, said today in a statement. That marked 10 consecutive months of growth, matching an expansion from June 2009 through March 2010.
In the first six months, sales across the region rose 6 percent to 6.85 million vehicles, ACEA said.
The June rise comes from a low base and was spread unevenly across the region. Analysts also said that heavy discounting and other incentives were distorting the true level of demand. Retail incentives across Europe's top five markets increased 10 percent year on year to a record 2,748 euros ($3,700) per vehicle, according to data from a major independent market research firm.
Peter Fuss, an Ernst & Young senior advisory partner, said: "Heavy discounting and other incentives for buyers remain a significant area of concern, as they continue to distort the true level of demand."
Hyundai's European operations head, Allan Rushforth, said: "After a six-year slump in the European car market, an inconsistent and heavily incentivized recovery is better than no recovery at all." The dilemma for carmakers now is how they pursue future sales amid pricing pressure, he said.
Skoda, Seat gains
Volkswagen sold 2.5 percent more cars in the region. Gains of 13 percent at both Seat and Skoda and a 1 percent increase at the premium Audi brand offset a 3 percent drop at the namesake VW marque. Seat is widening its Leon compact lineup while Skoda has renewed its Octavia top seller.