(Reuters) -- The car sales recovery in Western Europe gathered pace in January with a 7.1 percent gain as southern markets including Spain continued to bounce back.
Western Europe registrations last month increased to 960,531 cars from 897,008 a year earlier, based on data and estimates compiled by consulting firm LMC Automotive, helped by low oil prices and returning consumer confidence.
This compared with a 4.7 percent gain in December.
The strength of the year-on-year advance partly reflected weaker sales recorded in January 2014, however. Last month's selling rate fell slightly to 12.43 million cars annually from 12.61 million in December, on a seasonally adjusted basis.
"The Western European car market is off to a solid start," LMC analyst Jonathon Poskitt said. "Consumer confidence in the region is, in general, improving and, with relatively low oil prices assumed to carry on for some time, the economic outlook looks a little brighter."
The data, an aggregation of published registrations and projections for some smaller markets, show a regional advance powered by southern European countries recovering from the deep slump that followed the 2008 financial crisis.
January sales rose 28 percent in Spain and Portugal, and an estimated 42 percent in Greece, LMC said. Spain's recovery will remain a "key component of regional growth this year," Poskitt predicted.
Registrations in Germany, the region’s biggest market, rose 2.6 percent last month, while sales in the UK, the No.2 market, were up 7 percent. France reported a rise of 5.9 percent. Sales in Italy increased by 11 percent.
2% rise forecast
Industry association ACEA said European car sales are likely to rise by 2.1 percent this year, less than half last year's rate of growth,
Research conducted for ACEA by IHS Automotive sees new-car registrations increasing most strongly in Italy and Spain, followed by Germany, the UK and then other southern European nations, where pent-up demand is greatest.
"We welcome the year with cautious optimism," said ACEA President Carlos Ghosn, the CEO of Renault-Nissan.
New-car registrations in Europe - an area defined by ACEA as broadly the European Union plus Norway and Switzerland - grew by 5.7 percent in 2014, the first year of growth since the financial crisis. December marked the 16th consecutive month of year-on-year expansion.
Still, at a total of 12.55 million registrations, new car sales are still well below their 2007 peak of some 16 million units.
Ghosn said one of the most promising segments was for SUV/crossovers. "The trend has been there, but it is supported by the lower oil prices," he said.
Overall, the IHS study sees only limited benefit from lower oil prices, adding about 1 percent to global light vehicle demand, with less of an impact in Europe, where much of the pump price is tax.
The study forecasts global demand for light vehicles, which also includes vans, rising 2.4 percent. China, though slowing, would lead the expansion. Sales were likely to fall in the Middle East, Japan, Brazil and Argentina and Russia, the latter by some 27 percent