European New Car Sales Down 1.6% in May, Fiat Up

Europe's new car registrations fell for the fourth month in a row in May, but Fiat beat the market and its rivals with a 5.7% rise in sales thanks to tax breaks in Italy, industry data showed.

Registrations in Europe fell 1.6% as a decline in major markets in western Europe outweighed a rise in central and eastern Europe.

"Fiat was boosted by still strong sales of the Grande Punto," Citigroup analyst John Lawson said in a research note. "We expect continued resilience."

Sales at Volkswagen, Europe's number-one automaker by market share, fell 5.4%.

General Motors suffered the biggest decline among the major auto makers in the region, with sales falling 8.9%.

Renault was close behind, dropping 8.4%. A day earlier, it said its worldwide sales fell 4.2% in May ahead of the launch of a number of new and revised models.)

PSA Peugeot bucked the trend with a 2.8% rise, while DaimlerChrysler sales rose 2.4% and BMW gained 5.6%.

European sales at Ford fell 1.1% and Toyota Motor went down 2.6%.

In terms of market share, the biggest changes were seen at GM, which fell to 9.7% from 10.5%.

Renault slipped to 8.6% from 9.2%.

Gainers included PSA, rising to 13.1% from 12.5%. Fiat went up to 8.2% from 7.7%.

Fiat and other automakers were trading slightly higher than the Dow Jones sector index, which was 1.86% higher.

Stagnant Demand

Overall, new car registrations in Europe fell 1.6% to 1,442,518 units, according to figures published by the region's car makers association, ACEA.

The figure compared with a 2% drop for the region reported on Wednesday by Germany's VDA car industry association.

For the January-May period, registrations fell 0.5%, according to ACEA.

ACEA's numbers cover the 27 member states of the European Union except Cyprus and Malta. They also include member countries of the European Free Trade Association (EFTA).

It attributed the decline to a 2.4% drop in car sales in major markets in western Europe like Germany, which offset a 11.1% rise in eastern Europe and elsewhere.

"Car demand in western Europe is stagnant, contrasting with a general economic picture that seems to be improving," said Centro Studi Promotor, an Italian think tank.

VDA has cited a rise in value-added tax in Germany as one of the factors that could lead to Europe's biggest auto market registering a record low in demand this year.

Italy was the only major market to show a rise in May, up 7.3% thanks to government tax breaks to encourage drivers to buy new, less-polluting cars, ACEA said.

Germany fell 11.1%, while France went down 2.8% and Britain slipped 2.2%.

For the January-May period, Italy rose 6% and Britain rose 2.2%. Other major markets fared worse, with Germany tumbling 9.6% and France going down 2.4%.

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