European new-car sales showed a 13 percent year-over-year increase last month with 948,090 vehicles delivered, according to a report released Thursday by the European Automobile Manufacturers Association. This marks the fourth straight month of growth in the European market, the longest period of continued growth since 2010.
“That (growth) is massive for Europe,” says Paul Eisenstein, publisher of TheDetroitBureau.com, based in Pleasant Ridge. “This has been a market in free fall for quite a few years now. Until recently, nobody was sure where the bottom might be. The general consensus is that were starting to see at least the beginnings of a revival. The question will be how rapidly that might occur.”
Eisenstein questions whether this will be a selective or a broader-based recovery.
“While the continent may bill itself as the European Union, in reality, it is still a collection of individual markets and individual economies,” Eisenstein says. “This became very clear with the Greek crisis, which then spread to countries including Italy, Portugal, Spain, and Ireland. It remains to be seen whether (Europe’s) recovery is largely going to be driven by a select handful of markets, particularly Germany, which has remained the only real engine of the European market over the last (five years),” he says.
While German new car sales actually dipped 4.3 percent in December over the prior year, the country led the European market with 215,320 sales in December, followed by the United Kingdom with 152,918 sales, and Italy with 88,705 sales.
An upturn in the market would receive a warm welcome by automakers — European and American alike. “This has been devastating to the U.S. automakers, particularly Ford and GM, who have seen their losses go into the many billions… However, there have been signs that GM is beginning to see its turnaround plan working, and Ford seems to be showing some positive signs as well,” Eisenstein says. “But both have had to take painful steps (to get there), including plant closings.”
Overall, he says that while pent-up demand will help drive a resurgence, consumers will have to regain their confidence before Europe sees a recovery.