January sales of 1.2m units in western Europe, up 3.1% year on year, confirmed a rebound from disappointing fourth-quarter results and a rise of consumer confidence across the region, according to forecaster CSM Worldwide.
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Germany, France and Italy are expected to fuel growth in 2006 as Spain finally slows down and the United Kingdom confirms cyclical decline. CSM projects full-year passenger car sales of 14.68m units in 2006, up 1.3% over 2005.
Germany and France are expected to build on the growth levels achieved in 2005, and Italy will see a boost in consumer confidence, according to the sales forecasting service. In the remaining larger European markets, the evident slow-down of sales in Spain during Q4 2005 will continue to persist in 2006 and the significant five-year growth period in the United Kingdom has ended as expected, confirming the cyclical decline for 2006.
January sales growth in France, Germany and Italy was the ground for a slightly optimistic outlook throughout 2006, as consumer confidence rises throughout the region.
Demand in Germany fell in the closing months of 2005, lowering the full-year sales rise to 1.6%. In January, demand rebounded to a growth rate of 11.3%. The 2006 full-year selling rate projects the market toward 3.46m units, up 4.3% vs 2005 and underpinned by the VAT increase to 19% expected in early 2007.
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By GlobalDataThe car market in Spain has been strong since Q2 2003, and another record year of sales was achieved in 2005, despite the foreseeable slow-down. CSM forecasts sales to fall 1.3% as Spain’s base interest rates are set to increase to 2.5% in 2006, raising the cost of borrowing money and negatively impacting car sales.
Demand in France has mirrored neighbouring Germany. In January, sales rose 2.7%. The 2006 full-year selling rate projects the market toward 2.1m units, up 3.1% vs 2005.
The car market in Italy saw an upswing in late 2005 that carried on into January. Sales soared 10.7%, indicating sustainable demand in the present year. Full-year sales are expected to rise 4.2%, reaching 2.3m units.
United Kingdom car sales continue to experience a completely opposite cyclical trend in comparison to the region’s larger markets. Sales dropped 13.3% in January, marking the start of a difficult year. The 2006 full-year sales project the market toward 2.3m units, down 6.5% vs 2005.
