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Europe car sales rise as recovery ‘becomes more widespread’

The recovery in the European Union's car industry carried on through March, the latest figures show, with rapidly increasing sales in Spain and the U.K. and a bounce back in the mass market providing some much needed cheer for the region's automakers.

Alessia Pierdomenico | Bloomberg via Getty Images

Car sales in the European Union increased for a seventh month in a row in March, posting a 10.6 percent increase from the same period in 2013, bringing new passenger car registrations growth for the quarter to 8.4 percent, the monthly survey from the European Automobile Manufacturer's Association reports.

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However, with nearly 1.5 million vehicles registered, it was the second lowest result figure for March since the ACEA began compiling data for the expanded EU in 2003. Fort he quarter, new car registrations increased by 8.4 percent.

All major markets contributed to March's 10.6 percent rise, with the U.K. and Spain recording 17.7 percent and 10 percent growth respectively, with sales growth for the quarter hitting 13.7 percent in Britain.

France sales rose 8.5 percent, Germany saw 5.4 percent growth and Italian car sales were up 5 percent in March compared to last year.

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Mike Tyndall, auto analyst at Barclays Capital, said it was wrong to focus on the negatives in today's figures.

"If you want to be bearish, you can: it's the weakest March in a long time and the base gets tougher," he told CNBC in a phone interview. "I think we have a more constructive view. We can see when we adjust for seasonality that this looks to be a pretty good result. We would also argue the fact that mass market is outperforming premium is indicative of the recovery becoming more widespread."

Carlos Da Silva, the manager of European vehicle sales at IHS Automotive, concurred with Tyndall, stating in a note: "Although there are some variations here and there, the foundation for growth is widespread and, as such, limits the risk of a sudden turnaround."

Tyndall said that Britain's growth in car sales was due to "People seem to be deleveraging, paying off their credit cards, house prices are going up,unemployment is coming down. All of which makes people feel a bit happier about the outlook and that is underpinning the strength of U.K. sales."

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On your marques

When it came to car brands, Renault Group saw 19.6 percent sales growth between January and March this year compared to the same period in 2013, with Ford witnessing 12.8 percent growth and VW Group 8.4 percent. France's PSA Group recorded growth in sales of 7.7 percent between January and March 2014 compared to the same period last year.

Hyundai and Honda were the only car brands to see negative growth compared to the first quarter of 2013.

Commenting on the car makers' results,Tyndall said: "Renault, that's a highlight. They've been doing particularly well. They have got some new product out there, but it's surprisingly strong.

"Peugeot it's mixed. Citroen is doing okay but Peugeot brand is underperforming the whole market which is slightly disappointing given that the Peugeot 308 was named European Car of the Year."

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