Wednesday, May 21, 2014

Portuguese PM promises more reforms; European car sales growth slows - business live

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The BMW factory on March 15, 2010 in Munich, Germany.The BMW factory in Munich, Germany. Photograph: Miguel Villagran/Getty Images

European car sales have risen at their slowest rate in five months, adding to concerns over the durability of the recovery.

Industry body ACEA reports this morning that new car registrations across the EU rose by 4.6%, year-on-year in April to 1,089,226. That's the the third lowest figure for an April since 2003.

European car sales, to April 2014Photograph: ACEA

On the upside, this is the eighth month in a row when sales were higher than a year ago. And the late Easter this year probably won't have helped.

But the concern is that the revival is tailing off, at levels that are still historically weak. Especially after yesterday's disappointing GDP figures.

Car sales actually fell year-on-year in Germany, which doesn't suggest domestic demand in Europe's largest economy is going to drive the euro recovery strongly onwards.

Sales were down 3.6% in Germany, compared to April 2013. The Italian market was little changed, up 1.9%. But they rose 5.8% in France, +8.2% in the UK, and +28.7% in Spain -- where a government scrappage scheme has been driving demand.

Gian Primo Quagliano, head of automotive-research company CSP in Bologna, Italy, says the data shows there's no significant recovery in the industry - which employs hundreds of thousands of Europeans.

Quagliano told Bloomberg.

“We are not seeing a real recovery in the car market in Europe, just a modest rebound,”

“Europe needs economic measures to boost consumption and bring back customers into showrooms.”

So far this year, EU car sales have grown by 7.4% - and again, Germany is lagging behind.

ACEA says:

The increase in passenger car registrations in this period ranged from 2.9% in Germany, 3.7% in France, 5.0% in Italy to 12.5% in the UK and 16.2% in Spain.

EU car sales, to April 2014Photograph: ACEA

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