Car sales in western Europe surged around 5 percent in May 2014, although the seasonally adjusted annualized rate (SAAR) dropped from the April level, according to LMC Automotive. LMC analyst Jonathon Poskitt said in a report that they are reiterating forecast sales of 12 million units for the full year 2014, saying that economic growth and consumer confidence are heading in the “right direction.”
He noted that the road to recovery “remains a bumpy one." The surge in sales in western Europe mostly came from the United Kingdom, Spain and Germany. In fact, the UK car market jumped for the 27th consecutive month in May – marking the longest period of continuous growth in the country, Poskitt remarked.
He said that while recovery of other countries in western Europe is more patchy, the UK is experiencing growth thanks to factors like low interest rates, improved consumer confidence, and strong incentive activity. It is also expected to account for the largest chunk of sales in the region.
Germany, meanwhile, gained 5 percent in May and 3 percent in the first five months of 2014. LMC noted that May 2014 has an extra selling day compared to the same month in 2013. Likewise, May of 2013 posted weak sales.
Poskitt said that in selling-rate terms, May 2014 was weaker than previous months. He added that economic fundamentals appear solid and should help the western European market to top 3 million units for the full year 2014.
Spain gained the most in May, surging 17 percent in the month and 16 percent over the first five months of the year. A vehicle scrappage program in the country has been a main factor for the surge.
LMC is expecting Spain to continue the incentive scheme in the foreseeable future. Italy, meanwhile, saw May sales dip 4 percent but was still able to post a 3-percent jump in the first five months of 2014.