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article imageEuropean car sales rise in 2014, ending six-year slump

By Nicole Weddington     Jan 21, 2015 in Technology
According to the European Automobile Manufacturers Association (ACEA) car sales in the European Union rose in 2014. Sales have been up for the first time in six years.
The new report from the ACEA showed growth for the sixteenth consecutive month with an average growth of 5.7 percent over the 2014 sales year. 951,329 car were sold in the European Union in December. The market was led by growth in Spain (21.4 percent), the UK (8.7 percent), Germany (6.7 percent) and Italy (2.4 percent).
Sales of cars in France were down in December by negative 6.7 percent but remained stable for 2014 with a positive 0.3 percent sales increase.
The jump in car sales, though, has been driven by discounting, wholesaling and state-backed incentives. According to industry experts, the rise is not due to the recovery of consumer confidence.
“Not since the year 2000 have so few cars been bought by private individuals,” said Peter Fuss, an automotive analyst with E&Y business service group. “The European car market has bottomed out, but is only gradually emerging out of crisis mode.”
Industry experts are cautiously optimistic about the sales growth and are focusing on 2015. Nevertheless, the trends are reflective of sales growth across the world, including in the US. For example, Las Vegas Ford dealers have seen a dramatic grown in the first month of 2015.
“We remain cautious about the ability of new car sales to return to their pre-crisis levels by the end of this decade,” said Fuss to the BBC. “Furthermore, car sharing and other alternative trends of urban mobility are expected to gain relevance in the market amid shifting consumer preference.”
The CEO of Nissan-Renault, Carlos Ghosn, said at the Detroit Motor Show that expects 2015 sales to be around 1 or 2 percent higher than in 2014.
The benefits of European growth to car makers is also being dragged down by a reversal in demand in both Brazil and Russia. Economic growth in Brazil has slowed to a crawl, while the economic sanctions against Russia have dropped car sales precipitously. Car sales are also considered close to peak in both the UK and Spain.
“Consumer confidence is not showing a clear trend across the region and uncertainty about the Eurozone appears to be rising,” said analysts with Barclays. “It still feels like there is a wait-and-see attitude among consumers at present.”
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