December sales rose 5 percent from a year earlier to 997,238 vehicles, ACEA said. December was the 16th consecutive month of growth, the longest stretch of gains since the association began compiling registration figures in 1990.
Amid signs that economic expansion in euro countries was stalling, automakers widened price cuts in the final months last year to stimulate demand. "Not since the year 2000 have so few cars been bought by private individuals," Peter Fuss, an automotive analyst at EY said in a note today, referring to the fact that corporate and commercial purchases made up a large chunk of the sales.
The main drivers for last year's gains were "high discounts, cheap financing, government-subsidized schemes for buying new cars and a number of new models," Fuss said.
IHS Automotive analyst Carlos Da Silva said sales growth was helped by improvements in smaller markets such as Greece, Ireland, Portugal and many eastern Europe countries where customers needed to replace their cars regardless of economic conditions.
He said "disguised" sales practices by automakers were on the rise. These include registrations to rental businesses, by dealerships and self-registrations, he said. "The foundations for a flourishing car market are yet to be built," Da Silva said in an emailed statement.
All five of Europe's largest auto markets expanded last year, with increases of 18 percent in Spain, 9 percent in the UK, 4 percent in Italy, 3 percent in Germany and 0.3 percent in France. In Spain, the government has repeatedly extended an incentive scheme, known as Plan PIVE, which offers price cuts on new low-emission vehicles.