Western European new-car sales jumped 8.8 percent to 1.09 million in July, boosted by higher demand in Germany and recovering Italian and Spanish markets, analysts LMC Automotive said.
The market researchers said July's strong result reflects the improving economic backdrop and a more positive consumer sentiment.
LMC raised its forecast for annual sales in the region to 12.92 million, a rise of 6.7 percent. Its previous forecast was for sales of 12.8 million. The July numbers amounted to a seasonally adjusted annualized selling rate of 13.15 million cars, LMC said, slightly below June's 13.28 million rate but more than a million vehicles ahead of last year's total.
The forecaster said the German market was a strong performer with July sales up 7.4 percent and an annualized selling rate of 3.5 million, the best selling rate since July 2009 when a scrappage program inflated sales.
Italy and Spain continued on their recovery path. Italian sales surged 15 percent, helped by the country's exit from recession and improved consumer confidence. In Spain, sales grew 24 percent as the economy outperformed the rest of the eurozone and a scrappage program continued to boost demand.
France, however, saw its sales growth slow to 2.3 percent for the month with an annualized selling rate of 1.83 million cars, down from 2.07 million in June.
The UK's booming car market slowed last month, with sales up 3.2 percent, mainly due to fleet sales. The annualized selling rate is still near 2.6 million, LMC said.
Last month LMC had lowered its outlook for 2015 in light of the deteriorating situation in Greece and potential repercussions a Greek exit from the euro zone. Greek car sales fell 6 percent to 7,157 last month.
With the Grexit crisis averted, at least for the immediate future, and taking recent market results into account, the market could exceed 13 million units this year, the analysts said.
But, it added, risks to economic growth, both in Europe and elsewhere, remain skewed to the downside. "Bearing this in mind, 12.9 million units represents a balanced outlook," LMC said.
Reuters contributed to this report