European new-auto sales figures for the first month of the year are out. They show a fifth consecutive monthly increase and first January increase since 2010. Sales last month grew 5.5 percent compared to the previous January, to 887,252 units for 27 of the European Union’s 28 member states excluding Malta, which doesn’t provide regular figures.
The data show the biggest growth spikes in Ireland and Portugal, which topped 30 percent sales growth in 21 countries, with Austrian registrations shrinking in the double digits. Ireland and Portugal both topped 30 percent growth. The four key European markets saw growth, though France was almost flat. The UK and Germany, the two largest European auto markets, both topped 7 percent. Growth was largely in the expected range as the region slowly recovers.
Last year, the EU auto market shrank 1.7 percent to 11.9 million units, the lowest volume in 19 years. Full recovery isn’t expected until the end of the decade. January is typically a month where sales easily top one million units, according to IHS Automotive.
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Unlike in North America and China, sales in the world’s third most-important auto market have been dismal thanks to the region’s ongoing sovereign debt crisis and double-digit unemployment rate. Economic stagnation has battered the performances of automakers, especially those with high European exposure, like France’s PSA Peugeot Citroën (EPA:UG) and Italy’s Fiat SpA (BIT:F). Europe’s flailing auto market is one reason why automakers are scrambling to set up shop in China.
Digging out of a pit has to start somewhere. The question is whether the growth we’ve seen in recent months is part of a larger macro-economic rebound or just cyclical growth of buyers replacing clunkers and taking advantage of margin battering incentives.