Europe's weak recovery of car demand continued in November with car sales in the EU up by 1.2% on last year. It was the third consecutive month that the region has posted a positive year-on-year trend.

Analysts say the latest result reinforces a sense of stabilisation for the European car market after a two-year plunge that has left it at lows last seen in the early-1990s.

The European carmakers' association ACEA said that new registrations of cars in the region totalled 938,021 units in the month of November, 1.2% up on the count for the month last year. From January to November, 10,945,360 new cars were registered, or 2.7% less than in the first eleven months of 2012.

The data is consistent with that issued by LMC Automotive for Western Europe earlier in the month which showed a 0.7% gain in November. The broader EU numbers reflect a slightly more buoyant picture in some EU markets in the east of the region. November car sales in Poland, for example, were up 4.1% on last year.

In November, the UK (+7.0%) and Spanish (+15.1%) markets contributed to the overall 1.2% EU upturn. Demand in Germany (-2.0%), France (-4.0%) and Italy (-4.5%) was lower than in the same month last year.

IHS analyst Carlos Da Silva noted that Europe's car market is bottoming. "But it is certainly still too soon to talk about solid growth," he said. "For one, the situation country by country is quite contrasted. Apart from the UK that has been on the fast lane for nearly two years now (but slowing down lately), the other volume markets are still mostly in tepid waters: Germany and France are only and slowly stabilising, and Italy remains in dire straits (but improving nonetheless)."

Spain's 15% gain in November needs to be seen in context. It is recovering off a very depleted base and sales are benefiting from a scrapping incentive. "The comparison base [last year] is particularly favourable - in late 2012, VAT was increased depressing further Spanish car sales," Da Silva noted.

Da Silva also suggested the market has fallen so low that replacement demand from an ageing car parc in Europe is now providing some underlying lift to demand. "Replacement is now a necessity in many countries," he said. "Growth is at the corner, that is a fact. We only caution that it will certainly be a slow and staggered one for Europe."

At the OEM level there was some cheer for Renault, Toyota and Volkswagen Group in November's results. Market leading Volkswagen Group (+3.3%) was boosted by strong sales for its Skoda brand (+18%) and Renault (+9.9%) enjoyed a boost from Dacia (+31%). Toyota (+7.3%) was boosted by a strong month for Lexus (+32%).

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