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Demand for new cars accelerates, Renault speeds ahead

New car registrations in the European Union increased for a second month in a row in October, boosting hopes that the region's industry is starting to show faint signs of recovery.

Demand for new cars in the region increased by 4.7 percent on October 2012, according to data from the European Automobile Manufacturers' Association (ACEA), following a 5.4 percent expansion in September.

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It marked the first time in over two years that the market had grown for two consecutive months, although the number of units registered last month (1,004,935) was the second-lowest recorded for the month of October since ACEA records began in 2003.

All of Europe's major auto markets - except for Italy - showed signs of improvement over the month, with Spain posting the largest increase in registrations, up over 34 percent on October 2012. Meanwhile, the German market grew by 2.3 percent, France's expanded by 2.6 percent and the U.K. – which has consistently bucked the trend of weak demand - increased by 4 percent in October.

In contrast, Italy's market slipped by 5.6 percent on the same month the year before.

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An employee at the Renault factory in Maubeuge, France
Fabrice Dimier | Bloomberg | Getty Images
An employee at the Renault factory in Maubeuge, France

The figures –viewed as a bellwether for consumer confidence – came a week after official data revealed that the euro zone's economic growth slowed last quarter. The annual gross domestic product (GDP) of the 17-country group grew by just 0.1 percent in the third quarter of 2013, raising concerns that the region could be sliding back towards recession.

Europe's carmakers have struggled since the onset of the euro zone debt crisis, which hit consumer confidence across the region hard. In October, Italy's Fiatrecorded a 7.3 percent slump in new registrations from the same month in 2012.

France's Renault Group, however, bucked the trend, with demand jumping over 14 percent in October, driven in part by the popularity of its low-cost brand Dacia.

(Read more: EU Commission cuts euro zone growth forecasts for 2014)

Over the year to October, new car registrations fell 3.2 percent compared with the same period in 2012, the ACEA reported, with significant divergence across major markets. Germany's market declined by 5.2 percent, France's slipped by 7.4 percent and Italy's fell by 8 percent over the period. Meanwhile, car registrations in Spain grew by 1.1 percent and the U.K.'s market stormed ahead, growing by over 10 percent over the ten months.

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