Hopes for recovery to Europe's depressed car market have been given a boost as official data released in Brussels showed that the eurozone's economy edged out of recession in the second quarter. 

The return to economic growth comes after a record 18-month contraction, according to data released by Brussels-based Eurostat. The eurozone area grew by a stronger than expected 0.3% during the second quarter, the data suggests, with Germany and France leading the way.

The signs of upturn, however weak, will be especially welcome in the depressed European automotive sector. 

There has also been some positive news on the car market front. Data from LMC Automotive shows that car sales in Western Europe grew by 4% in July. For only the second month this year, the Western Europe car market climbed into positive territory in year-on-year terms — although this is mainly due to one additional selling day, on average, versus July 2012.

The analysts at LMC suggest that the West European car market Seasonally Adjusted Annual Rate (SAAR) of sales stood at 11.5m units for the most recent month and that “supports our view that the situation will slowly pick up over the remainder of the year”.

The car market last month was up by 2.1% in Germany (though the year-to-date market was down by 6.7%). 

There were positive year-on-year comparisons in July to be made in France and Spain too, and even though the Italian market was lower, its result was the smallest contraction for nearly two years.

“As the underlying economy begins to improve, we forecast that so too will the region's car market,” said LMC analyst Jonathon Poskitt.

Among the larger car markets in the region, the July results suggested the picture was brightening. The UK continues to lead the way with private and fleet/business both seeing double-digit percentage improvements on the same month last year. The German selling rate picked up above 3.0m units a year. In France, the selling rate was once again over 1.8m units a year.

In Spain, the market was up 15%, though it remains supported by a government backed scrappage scheme that was recently extended for a third time. With the second part of the scheme, PIVE 2, running out much earlier than anticipated, the underlying level of demand clearly remains very weak, LMC said.

Despite the recent apparent stabilisation of overall demand, for 2013 as a whole, LMC forecasts the West European car market at 11.41m units, some 3.1% down on last year.

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