Car sales in Europe chart healthy rise

NEW car sales in Europe rose in June for the first time in 14 months, driven higher by scrappage schemes in over 10 member states, in a sign that the battered industry may be motoring towards recovery.<br /><br />Car sales rose 2.4 per cent last month from a year ago, to 1.5m units throughout Europe, where 2.2m people are indirectly employed by the industry, data from the European Automotive Manufacturers' Association showed.<br /><br />Earlier this week, BMW&rsquo;s head of sales and marketing suggested the worst was over for the high-end car sector, adding that the German luxury carmaker was ready to up its production in the next six months.<br /><br />&ldquo;The reason why the figures start to look better from here on in is because it was this time last year that car sales really started to fall off a cliff,&rdquo; Credit Suisse analyst Stuart Pearson said.<br /><br />He added: &ldquo;You&rsquo;ll start to see some much healthier looking European sales figures but you shouldn&rsquo;t really be deceived.&rdquo;<br /><br />Sales of new cars in the first half of the year dropped by 11 per cent year-on-year throughout Europe, as 7.4m units were registered, down from 8.3m the year before.<br /><br />Countries with incentive schemes, such as the cash-for-bangers programme, showed the most growth, with Germany&rsquo;s new car sales up 40.5 per cent from a year ago.<br /><br />Earlier this month, the UK&rsquo;s Society of Motor Manufacturers and Traders said that the number of new cars sold in Britain for June totalled 176,264 &ndash; a 15.7 per cent drop on the June 2008 figure. It was the shallowest decline the industry had seen for almost a year.<br /><br />Business secretary Lord Mandelson introduced a scrappage scheme in the UK in May.<br /><br />&ldquo;The scrappage effect has been less in the UK than Germany,&rdquo; Ernst &amp; Young partner Eric Wallbank said.<br /><br />&ldquo;However, the downside for the German market is they are expecting a second dip in sales when its scheme ends &ndash; if this happens in the UK it will be less severe,&rdquo; he added.<br /><br />This is because, in Germany, the scheme applies to cars over eight years old and the incentive is larger.