Europes car market is off to a strong start this year

Europe's car market is off to a strong start this year

Car sales in Western Europe grew by 5.9% year-on-year in January, a result that LMC Automotive described as 'a very promising start to the year'.

The gain was in spite of one fewer selling day across all markets. The annualised selling rate for the region last month stood at a very respectable 13.9m units a year.

Car sales in Germany were up by 3.3% last month and the Spanish car market saw its best January result since 2008, with over 76,000 cars sold, a 12.1% gain on last year. Italy performed even better, posting a 17.4% rise in January, while France also saw growth (3.5% YoY).

The UK rounded off a good performance for the Big Five markets in January, with sales up 2.9% YoY implying a selling rate of close to a staggering 2.7m units a year.

LMC forecasts that the West European car market will grow by 4.7% to 13.8m units this year.

LMC Automotive analyst Jonathon Poskitt noted that the economic backdrop in the region remains broadly favourable for new car demand this year. "With unemployment falling across the region and energy prices set to remain low, prospects for household spending this year look bright," he said. "And the outlook for interest rates is for them to stay at very low levels for the foreseeable future, something which will also help to support the car market via cheap consumer finance and stronger economic activity. There are risks to our forecast, of course, but prospects for further car market growth across Europe this year remain fairly bright."