LEIPZIG, Germany -- New car sales in western Europe rose 1.3 percent last month -- the first gain this year -- thanks to solid increases in France, Germany and Spain, data showed on Friday.
New car registrations advanced to 1.29 million units in April, led again by brisk showings from German luxury carmaker BMW and South Korea's Kia Motors.
Italy's hard-pressed Fiat had another dismal sales month, while France's PSA saw sales slip as well.
Figures compiled by Brussels-based car industry group ACEA showed registrations in the 15 legacy European Union members plus Norway, Switzerland and Iceland slipped 1.5 percent in the first four months of 2005 to 5.11 million cars.
Including the new EU members except Malta and Cyprus, registrations dipped 0.8 percent in April and fell 2.6 percent in the first four months amid an influx of imported used cars to eastern Europe.
"These figures reflect the slowdown of the European economy observed since the beginning of the year," ACEA said in a statement, noting early Easter holidays this year had added an extra shopping day in nine countries in April.
Car sales so far this year have faltered after a late 2004 rally fueled by incentives and extra selling days that helped mask underlying weakness in the retail car market.
Slack sales are exerting pressure on carmakers already squeezed by a strong euro, high raw materials prices and excess capacity that is weighing on prices in cut-throat competition.
Carmakers are hoping that a raft of new models will boost sales as the year goes on, boosting stock valuations wallowing at the lower end of long-term averages.
END OF THE TUNNEL?
Credit Suisse First Boston, which has been downbeat on the sector for months, struck a more optimistic tone on Friday, raising its overall rating on European carmakers to "market weight" from "underweight".
"In our view, Q1 2005 results were not as bad as expected. DaimlerChrysler, Volkswagen (and) BMW did not warn, when news flow could have suggested risks were on the downside," the investment bank said in a note to clients.
"Cash flows remain strong and are now coming back to shareholders. Very large increases in dividends at Renault, Michelin, Continental. Volkswagen and DaimlerChrysler maintained high-yielding dividends in the face of scepticism (as has GM)."
Group registrations for struggling Italian carmaker Fiat slumped 15 percent in April, led lower by Fiat brand cars, whose market share shrank a full percentage point to just 4.7 percent as it cut back on heavy discounting that can boost volumes.
The Italian market has also been weak this year.
Volkswagen's group registrations gained 6 percent, boosting its western Europe market share to nearly 19 percent, aided by strong showing its its Audi luxury arm and Czech-based entry-level brand Skoda.
French carmaker PSA's market share eased again. PSA has also been scaling back unprofitable business even at the cost of selling fewer cars.
BMW boosted group registrations nearly 23 percent, vaulting its western European market share above that of Toyota.
BMW has the biggest new product offensive in its history, including its well-received 1-series compact and revamped 3-series model.
Despite record sales, BMW has forecast only flat 2005 earnings given the strong euro and rising prices for raw materials such as steel and plastics.
South Korea's Kia once again led growth by all manufacturers, with registrations leaping 43 percent last month despite harder year-on-year comparisons. Its market share rose to 1 percent from 0.7 percent a year earlier.
Other Asian carmakers turned in mixed showings.
Toyota's registrations, including its luxury brand Lexus, rose 4.7 percent, boosting the world's number two carmaker's market share to 5.2 percent.
Mazda sales plunged 17.6 percent, but Honda grabbed more market share.
General Motors, the world's biggest carmaker, boosted its market share to 10.8 percent from 10.2 percent thanks to gains by its Opel/Vauxhall brand. That put GM ahead of Ford's 10.4 percent share after a 7.4 percent sales drop.
Both big U.S. carmakers have slashed their 2005 earnings forecasts as they lose domestic market share to foreign rivals and face mounting costs for raw materials and health care.
MG Rover, the last independent British carmaker whose bankrupt business is being run by administrators, saw April sales collapse 76 percent to just 2,574 cars.