FRANKFURT -- New car registrations in western Europe surged 7.7 percent in December, extending November's rebound and pushing car sales to the highest annual level since 2001, official figures showed on Friday.
German luxury automakers BMW and DaimlerChrysler posted strong gains and Korean carmakers Hyundai and Kia paced the rally, while Italy's struggling Fiat slumped again.
Extra selling days, generous buyer incentives, fresh models and perhaps some fudging of the numbers by manufacturers helped registrations jump to just over 1 million units last month, figures compiled by Brussels-based carmakers' group ACEA showed.
That brought the 2004 total to 14.5 million cars, a gain of 2.1 percent and the best showing since 14.8 million in 2001.
The ACEA data include registrations in the 15 legacy EU members plus Norway, Switzerland and Iceland.
While flattered by two more selling days in major markets like Germany and Italy and one extra day in other big countries, the numbers mark "an encouraging end of the year", ACEA said.
But car industry executives are not so sure.
"The environment is going to be at least as challenging in 2005 as in 2004," Ford of Europe Chairman Lewis Booth told reporters this week at the Detroit auto show.
"We still see no retail demand in Germany and until we see signs of retail customers coming into showrooms in Germany the European industry is going to stay challenged."
He said some carmakers were using temporary registrations and other tricks to inflate their year-end numbers.
"It is a shaky market. It is market that is not really going anywhere," General Motors Europe President Carl-Peter Forster told Reuters in Detroit, predicting a flat 2005 market.
Nevertheless, new car registrations in Germany soared more than a fifth in December. Analysts cite new models and discount wars as manufacturers offered margin-eroding incentives to boost sales in Europe's biggest car market by far.
Amid the biggest model offensive in its history, BMW saw December registrations gain 25.1 percent to 61,124 cars, helped by its new 1-series compact and the urban-chic Mini brand.
Rejuvenated A-class and C-class models helped DaimlerChrysler registrations swell nearly 21 percent.
Korean carmakers kept pumping out products to consumers seeking fuel-efficient, quality cars at attractive prices. Asian carmakers are also getting a competitive edge from the euro's strength against other major currencies.
Registrations of Kia cars shot up 90.5 percent to 13,345 units, boosting its market share to 1.3 percent.
Registrations for Kia's parent Hyundai advanced 56.7 percent. It grabbed 2.1 percent of the market in 2004.
France's PSA Peugeot Citroen, Europe's second-biggest carmaker, boosted registrations 6.2 percent last month but was down 3.3 percent in 2004, dropping its market share to 14 percent behind leader Volkswagen's 18.1 percent. VW registrations gained 8.9 percent in December.
France's Renault had a dismal December, when registrations slid 7.5 percent, keeping 2004 sales below 2003.
An ageing line-up for the Fiat brand kept hitting the Italian group, which has threatened to exercise a put option that would force GM to buy its ailing car business.
Fiat group registrations retreated 2.7 percent, although full-year sales were flat. Analysts think Fiat sales may stay weak until the new Punto model hits the market later this year.
World No. 2 Toyota's market share rose to 4.5 percent as registrations gained nearly 15 percent, bringing its 2004 market share to 5 percent including its luxury Lexus unit.
Japan's Honda generated 40 percent growth and hard-pressed Mitsubishi saw registrations rise nearly 15 percent. Mazda registrations rebounded from November's dip, while Nissan's weak showing continued with a 25.8 percent drop last month.
General Motors, in the midst of sweeping job cuts at its loss-making European arm, saw registrations advance 7.2 percent to help full-year sales edge higher, while Ford registrations rose 3.7 percent, giving it 4 percent 2004 growth.