Car sales in Western Europe grew by a healthy looking 14.9% year-on-year in January, according to data released by JD Power Automotive Forecasting.

However, JD Power said that the year-on-year comparison masks the fact that comparison was made with an exceptionally weak January 2009 when the seasonally adjusted annualised selling rate  (SAAR) had fallen below 11m units a year (prior to the scrappage schemes that lifted sales across Europe last year).

Car sales in Germany were down by 4.3% and JD Power said the decline in sales, post scrappage incentives, continued in January as the German selling rate fell to 2.85m units.

However, JD Power analyst Pete Kelly told just-auto that the German result for January was better than many expected.

“There is still some backlog of sales coming through from the scrappage scheme,” he says.

“And demand in Germany has also been helped by some very heavy discounting by manufacturers, something that we expect to continue.”

JD Power also said that sales in France and Italy held up well as the tail-end of 2009 incentives continued to pass through the registrations system.

In both countries, sales are likely to weaken in the months ahead.

Some uncertainty remains in Italy over the incentive scheme renewal — this has taken on a political aspect as Fiat and the Italian government discuss incentive support and Fiat’s desire to reduce capacity in Italy.

JD Power also said that the Spanish and UK markets continue to benefit from still-active incentive schemes.

JD Power says that in the US it assumes no new funding will be made available for the scrappage scheme – recently extended on time period to March. The ministry in charge of the scheme has given final-days quotas (from the diminishing remaining funding) to vehicle manufacturers supporting this assumption and also making clear the government’s position about renewal of the scheme.

Meanwhile, in Spain, more cash has been made available for the scrappage scheme there, which is now expected to provide support to the market well through the first half of 2010.

JD Power forecasts that the West European car market will decline by 9.1% to 12.4m units in 2010, as the effects of the scrappage scheme ending in Germany are felt more strongly later this year.

Dave Leggett