MILAN (Reuters) -- Italian new car sales climbed 7.9 percent in July, data showed on Tuesday, but analysts were split on whether the stronger-than-expected rise signalled a market turnaround or the effect of aggressive marketing.
Loss-making Fiat continued to lag the market but a new version of its top-selling Punto model helped boost its sales 5.2 percent -- only its third rise in the last 18 months.
Fiat won 28.7 percent of the market, up from a historic low of 27 percent in June.
"Its a little early to sound the all-clear on one month's data, especially considering the economic climate, weak consumer confidence and spending. But it's good news for Fiat...whose marketing seems to be paying off," said a Milan-based analyst.
Fiat shares rose to a five-week high on the data and by 1033 GMT were trading at 5.99 euros, up 2.8 percent.
Industry watchers had forecast July sales would be flat on 2002, when a steep drop in registrations slowed thanks to new incentives on eco-friendly cars. Instead sales boomed to 220,600 units, the first rise since the incentive scheme ended in March.
Industry body Centro Studi Promotor said July's data had been inflated partly by a rise in so-called zero-kilometre cars, which are registered as they go to the dealership, where they could sit unsold to a final customer for months.
"That isn't enough to explain the strong rise...It seems the market has absorbed the shock of incentives ending and is showing staying power, even recovery," CSP said in a statement.
POWER OF MARKETING
Fellow auto body Anfia was not so positive and put July's rise down to aggressive marketing campaigns and people's desire to get a new set of wheels before heading off on holiday.
Fiat is due to launch three key new models after the summer and has taken out full-page adverts to sell the out-going Panda and Seicento minis at a maximum of 6,500 euros with zero-percent financing. Rivals are also offering deals, mainly on small cars.
"Orders fell 4.95 percent year-on-year in July...it is likely that the next months will see a drop in demand, also because the comparison base is high," Anfia said.
In the first half of 2003, Western European car sales fell 2.6 percent as weak consumer confidence held people back from splurging on a new car. A pick-up in June sowed hopes of revival but last week France posted a six percent fall in July sales.
CSP said the overall tone among Italian dealers was still grim but that things were getting better.
In July, 70 percent of car salesmen said orders were low, better than 86 percent in April. Meanwhile, 74 percent of dealers were seeing a slow flow of visitors against the 91 percent who felt their showrooms were empty in April.
CSP has forecast Italians will buy less than two million new cars this year against 2.2 million in 2002 but said that if Fiat's new models sell well, it may raise its forecasts. So far this year Italian car sales total 1.46 million.