Europe's first-half vehicle sales rose by 4.6 percent, defying predictions that the market would be nearly flat, and pushing monthly volumes to the highest level since June 2007, the pre-recession high point.
Every auto group except General Motors showed gains in year-over-year sales in the first six months. There are signs, however, that the European rebound that started in 2013 may be losing steam, including a 1.3 percent contraction in the UK, Europe's second-largest market after Germany, which also trailed the average with 3.1 percent growth in the half.
Elsewhere in Europe's five largest markets, Italy gained 8.9 percent and edged into third place by vehicle sales ahead of France, which rose 3 percent. Fifth-place Spain increased by 7.1 percent. But the real winners were the newer members of the European Union: Romania surged 27 percent, Croatia 24 percent, Lithuania 20 percent and Bulgaria 19 percent.
First-half sales were bolstered by solid macroeconomic fundamentals, according to the European Central Bank. Rising economic confidence, low interest rates and falling unemployment are expected to support domestic consumer demand, the ECB said in an optimistic forecast in late June. "The economic recovery in the euro area is projected to continue, at a faster pace than previously expected," the bank said, with GDP expected to grow at around 1.8 percent a year through 2019.
"Automakers have rarely (if ever) had it so good in the region," Exane BNP Paribas said in a June report in which it revised its 2017 sales forecast to 3.6 percent growth from 0.9 percent.