New car sales in Europe rose 6.2 percent in January as a gradual recovery in the region gained momentum. As Grace Pascoe reports retail incentives and new product launches boosted demand for most brands.
European car sales have shifted up a gear. New vehicle sales rose robustly by 6.2 percent in January. JP Morgan's Kerry Craig thinks pent-up demand is in play. (SOUNDBITE) (English): JP MORGAN, GLOBAL MARKET STRATEGIST, KERRY CRAIG, SAYING: "After years of recession and consumers not spending on those discretionary items you are seeing them start to return and start to actually pick up those things that they wouldn't have done in the past." Data from the Association of European Carmakers shows over a million vehicles were registered last month - almost 62,000 more than the previous January. For six years a sales slump plagued the industry, particularly in the larger European markets. January's rebound was widespread - with Portugal and Spain enjoying a 28 percent increase - an encouraging sign for the wider European economy. (SOUNDBITE) (English): JP MORGAN, GLOBAL MARKET STRATEGIST, KERRY CRAIG, SAYING: "We expect the momentum to slowly pick up and in fact I think you might see forecasters start to slightly revise up their expectations for economic growth this year." Volkswagen and Renault's namesake brands did well - with sales up 8 percent and 11 percent respectively. GM's Opel/Vauxhall brand saw a 15 percent rise. But most mass market car makers saw an increase with customers attracted by new models and retail incentives.