U.S. News

European Car Sales Hit Record High in November

New car sales in Europe last month rose 3.9 percent to a record level for November, helped by a surge in Germany before a VAT tax rate rise and with Fiat, Volkswagen and Toyota leading the charge, industry data showed on Friday.

It was the best November sales figure since Brussels-based carmakers group ACEA began compiling data in 1990.

Japan's Nissan posted a second consecutive month of solid sales, while sister company Renault of France got clobbered again, losing more than a full percentage point of market share.

New car registrations in Europe rose for a second month in a row to 1.22 million vehicles, bringing market growth in the first 11 months to 0.8 percent.

"With the number of working days comparable with respect to November 2005 across the whole region ... this result was positively influenced by a sound performance in the German market," ACEA said, citing purchases ahead of the VAT increase on Jan. 1, 2007.

Germans are rushing to buy big-ticket items before value-added tax rates advance to 19 percent from 16 percent at the turn of the year.

That has helped mask sluggish underlying demand that carmakers have been countering with margin-sapping incentives unless they have hot new products to lure customers.

Fiat has had sales hits with its Grande Punto and Panda small cars plus the Alfa Romeo 159 sedan. New car registrations for the Italian group advanced 15.1 percent year-on-year, with a 17.7 percent increase at its core Fiat brand. Alfa Romeo brand sales gained 17.1 percent in November.

Fiat shares rose 2.4 percent to 14.35 euros by 0922 GMT, helped in part by J.P. Morgan's raising its price target for the stock to 17 euros.


Japan's Toyota, the world's second-biggest automaker, saw sales of its flagship Toyota brand rise 10.8 percent to over 66,000 units. Sales growth for its premium brand Lexus slowed to 5 percent in November but was still up 84 percent year to date.

Solid sales of Toyota's Aygo, Yaris and Corolla models have helped build its market share to nearly 6 percent this year.

Double-digit growth at the VW, Audi and Skoda brands drove Volkswagen group registrations up 11.1 percent to more than 266,000 units, keeping it atop the European tables with a market share of 21.8 percent in November and of 20.2 percent in 2006.

Renault group sales plunged 18.2 percent as the French market turned weak. Sales of Renault brand vehicles alone shrank 18.3 percent as it focuses on profitable business. Sales at its Dacia brand, maker of the no-frills Logan family car, dropped 13.7 percent last month but have nearly doubled this year.

Renault shares gained 0.7 percent to 91.20 euros, in line with the DJ Stoxx European car sector index.

Renault stock has been battered down this year and now trades at just over 8 times estimated 2007 earnings per share, the lowest by far among European carmakers.

Sales at PSA Peugeot Citroen rose 2.5 percent, paced by the Citroen brand.

Brisk growth for Mercedes-Benz and Chrysler helped DaimlerChrysler offset a sales drop at the Smart brand and boost group registrations 6 percent.

Arch rival BMW saw sales edge up 0.6 percent.

Honda's sales advanced 16.6 percent, continuing its strong showing this year, and Mazda Motor Corp showed a rise of 6.6 percent.

Sales at South Korea's Kia Motors declined 4.5 percent in November and were down almost 11 percent so far this year. Kia was the fastest-growing brand in Europe in 2005.

Sister brand Hyundai, which has scaled back its forecast for European sales growth given tough market conditions, saw sales fall 3.8 percent.

Ford Motor Co outperformed the market with a 9.7 percent sales gain as the Ford brand and Volvo offset declines at premium marques Land Rover and Jaguar.

General Motors group sales inched up 0.4 percent, helped by its entry-level Chevrolet brand and by Opel/Vauxhall, while Saab sales slipped.

The ACEA data reflect registrations in all European Union countries except Malta and Cyprus and include Norway, Switzerland and Iceland.

Excluding the newest EU members, registrations rose 3.9 percent last month to 1.16 million vehicles.