Europes car market is picking up, but full recovery remains a long way off

Europe's car market is picking up, but full recovery remains a long way off

Car sales in Western Europe grew by 5.1% in February, the sixth consecutive month of expansion, according to data released by LMC Automotive.

The result will be seen as further evidence of a sustained turnaround in Europe's car market, though analysts note that recovery remains weak and is coming off a low base.

February's The Seasonally Adjusted Annualised Rate (SAAR) of sales for February stood at 11.9m units a year, the West European car market still way under the 14m-plus markets of pre-recessionary times.

February car sales in Germany were up by 4.3% on last year - the year-to-date market was up by 5.7%. Selling rates (SAAR) in Germany so far this year have averaged over 3.1m units. LMC said that following a disappointing year in 2013, car sales in Germany appear somewhat stronger in the early months of 2014. With a healthy labour market and rising real wages, the outlook appears bright for the region's largest market.

There was also positive news from the latest results in Spain with the market up 18% on last year. The Spanish economy has now begun expanding though the government's PIVE scheme continues to be implemented due to the current fragility of the market.

Italian sales were up solidly in February but, like Spain, the selling rates remain low by historical standards.

The UK market continued its run of positive year-on-year monthly results. February represented the 24th consecutive month of improvement.

Of the major markets, only France saw a fall versus February 2013. LMC noted that concerns remain over the wider economic recovery in France. Any meaningful growth in car sales in France will likely be postponed until employment prospects pick up, the forecasters said.

LMC forecasts that the West European car market will grow by 3% in 2014 to 11.9m units.

See also: ANALYSIS: Europe's under water car market growing again