Sales in Germany of new cars climbed 9% in March 2015 due to an extra sales day and a strong optimism experienced by the largest economy in Europe. Sales in key markets in the region, including France and Italy, also went up last month. It appears that the gradual recovery in this region is continuing.
German motor transport authority (KBA) said last Thursday that in Germany, registrations increased to 323,039 vehicles.
Consumer morale is robust – evident in the 4.6% increase year-on-year of sales to private customers (which make up 35.8% of the market). Sales in the first quarter grew 6.4% to 757,630 units. KBA records also show that the 9% sales boost in March is the widest monthly jump in at least the last 15 months.
London-based Evercore ISI analyst Arndt Ellinghorst said that Germany has been recovering from “very low levels” and that the buyers are becoming more optimistic. He believes that this trend is felt across Europe.
Ellinghorst added that 90% of German car dealers are confident that in the next quarter, business will either improve or stay stable as the result of better used vehicle prices and stable discounts.
In March, the unemployment rate in Germany reached a record low of 6.4% while the closely monitored Ifo business climate index grew for a fifth consecutive month, doing better than consensus predictions.
According to Matthias Wissmann, president of the VDA industry association, the figures in March offer us a reason to be “optimistic” about the rest of the year. He cited reasons for vigilance, including “global crisis spots and the dramatic slump of the Russian economy” that could affect economic development in Germany and Europe."
Last month, sales grew 9.3% in France, 19% in Italy and 41% in Spain. France's CCFA raised its full-year forecast from "stable" to a 2% increase, not very far from the predictions for Europe in general.
Industry sources believe that one factor that has driven up the European recovery is the demand for replacement cars. Prior to 2014, the region experienced a sales slump for six years. During the last few years, businesses affected by the recession have put off plans to renew the car fleets.