European new car sales boomed in March 2017 with new registrations for the month totalling 1.93m units, a 10.8% rise year on year and a record for the month.

The European market also overtook the US to become the world’s second largest region for car registrations last month, according to JATO Dynamics.

All five of the largest regional markets posted a healthy increase in registrations, with Germany, Italy and Spain all experiencing double digit growth. The largest increase was posted by Italy; registrations increased by 17.4% – this was largely boosted by pre-registrations, as private demand has cooled
following lower incentives.

This was followed by Spain, where registrations increased by 12.7%, and Germany, where registrations increased by 11.4% due to strong private demand and increased SUV registrations.

The UK experienced growth of 8.4% in March, as the market reacted to the impending tax changes that came into force in April.

Twelve other markets also posted double-digit growth. Countries such as Poland benefited from a strong economic situation, with positive consumer sentiment contributing to the market’s 26% increase.

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The 22.3% increase in the Netherlands was influenced by increased purchasing power among consumers, as well as a larger amount of jobs with leasing contracts.

Q1 2017 volume by countries

“For the first time in seven years, the Volkswagen Golf has been overtaken by the Ford Fiesta as Europe’s best-selling car model. There are several reasons behind this shift – one of which is that the Volkswagen Golf is also experiencing a natural lull in sales, as it runs down on stock of its pre-facelift range. On top of this, Ford’s incentive programme has been more aggressive when compared to Volkswagen. There’s also been a general slowdown on diesel registrations across the continent, which has had a notable impact on the Golf, but has left smaller segments, where the Fiesta sits, relatively unaffected. This change in position may only be temporary, as we expect the updated Golf model to reinvigorate sales once it becomes more readily available in the market,” said JATO’s global automotive analyst Felipe Munoz.

Top selling brands

SUVs continued to dominate the market, thanks in particular to a more active VW Group, which is expected to continue this trend as it launches several more SUV models in coming months. New SUV launches also benefited brands such as Maserati, Jaguar and Seat.

Top selling models

The big story of the month was the Ford Fiesta overtaking the Volkswagen Golf as Europe’s most popular car. The Golf has held the top position for several years, and was last overtaken in March 2010.