Western European car sales rose 3.2% year-on-year in October to 1,147,269 units, according to Global Insight forecasts.

Large gains in France and Spain and a smaller rise in Germany combined with flat Italian and UK figures to ensure the strong last month. However, the gains were largely due to an extra working day in October compared with the same month in 2005 and an overall market adjustment following a downbeat summer for the major west European markets. October's gains meant that year-to-date (YTD) sales were up just 0.3% to 12,450,261 million units entering into the final couple of months of 2006.

As in previous months it was the Fiat Group and Toyota that reported the largest sales gains in October, but surprisingly PSA Peugeot-Citroën was also among the top performing car manufacturing groups last month. In percentage growth terms, Toyota, Fiat Group, PSA Group, General Motors Europe and the Volkswagen Group increased sales above the market average in October, whereas DaimlerChrysler (DCX) and Hyundai suffered the largest deficits.

In absolute terms, the Fiat Group has again reported the strongest unit gains in October, with an additional 11,800 vehicles sold in western Europe compared to the same period last year. Aided by the new Grande Punto and Panda models, Fiat has made good strides in several high-volume European markets in addition to strengthening its position at home. The Italian carmaker is also benefiting from a sales turnaround at its Alfa Romeo division.

Sales at Toyota accelerated further in October, advancing 18.4% or an extra 10,800 units compared to last year. The Japanese brand continues to make steady progress in the high-volume markets of German and France, underpinned by robust sales of its Aygo, Yaris and Corolla models. PSA Peugeot-Citroën made a surprise return to the forefront of the western European market after several months of declines. The French carmaker's sales surged 6.5% last month, and much of the gains were apportioned to the Peugeot brand and solid growth on the domestic market.

Both in October and on a year-to-date basis, the VW Group maintained its leading position on the Western European market. Sales rose 4.1% and 6.0% in October and in the ten-month period respectively. Despite the aggressive foray realised by the Fiat Group and Toyota, on a cumulative basis, the VW Group was still the undisputed winner, increasing total sales by 138,744 units on the same period last year. The Fiat Group reported the second largest gains (+134,240 units) in the period to October, and achieved total sales of 951,872 units, thus confirming its lead on DaimlerChrysler, whose YTD sales were up a meagre 0.1% at 768,554 units. The US-German carmaker has benefited from a late return to form of its premium Mercedes brand, but continues to suffer from a marked sales shortfall from its Smart division.

Toyota maintains its eighth position with steady sales gains in the period under review and is edging closer to achieving its ambitious sales targets in the region and is closing in fast on DCX. In contrast Renault is by far the biggest loser, as volume sales shrank by 117,057 units in Western Europe in the first ten months. It is followed by fellow French carmaker PSA Peugeot-Citroën, whose YTD sales figures still showed a deficit of almost 44,000 units despite its performance in October and GM, with YTD sales figures showing a 2.9% deficit.

Although cumulative volumes are now largely flat with 2005, cumulative figures highlight the competitive nature of the market but also suggests that the strongest performers are those carmakers with the most recent model range supported by aggressive pricing and marketing efforts, Global Insight said.

Traditionally strong volume manufacturers such as PSA Peugeot-Citroën, Renault, Ford and General Motors (GM) are under intense pressure as Toyota and Fiat have geared up their presence and Volkswagen (VW) is making unstoppable strides forward. However, looking forward, Fiat is not expected to be able to continue to increase sales at the same rate as the robust pace of the Italian market is expected to slow in the second half while competition in the important B segment will increase following the release of such tough contestants as GM's new generation Opel Corsa, while many of the sales in this segment have already been caught by the new Renault Clio and Peugeot 207.

Fiat's ability to re-establish itself will be tested as the Stilo's successor, the Bravo, rolls out to challenge the ageing Ford Focus and Opel Astra in early 2007.

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