FRANKFURT -- Fresh models and buyer incentives helped new car sales in Europe accelerate by 4.5 percent last month, ending the first half with a record June after a weak start to 2005, industry data showed on Wednesday.
Car registrations in 23 European Union countries plus Norway, Switzerland and Iceland advanced to 1.55 million units, buoyed by another strong month in Germany -- the continent's biggest market by far -- plus solid numbers in France and Spain.
Sales of new cars in Italy leaped 18 percent as the market snapped back from a transport strike that disrupted May sales in Europe's third-biggest car market.
German luxury carmaker BMW and South Korea's Kia Motors strongly outpaced the market again, while Volkswagen, Europe's biggest automaker, stormed back with brisk sales that lifted its market share to 19 percent.
Italy's struggling Fiat, which had been hit especially hard by the strike of car transport truckers, saw registrations fall 4 percent despite the surging Italian market.
Figures compiled by Brussels-based car industry group ACEA showed that registrations in the 15 older European Union members plus Norway, Switzerland and Iceland rose 4.5 percent in June but dipped 0.3 percent in the first half to 7.81 million cars.
Including the new EU members except Malta and Cyprus, European registrations eased 1.1 percent in the first half.
Bank Sal Oppenheim analyst Michael Raab attributed the sales rise to new models, such as the Mercedes B-class compact sport wagon and BMW 3-Series sedan, the strike impact from Italy and the attraction of buyer incentives that fuel sales but hurt margins.
"The pricing environment, in particular in the mass market, is going to stay highly competitive. Selling vehicles without significant incentives in that part of the market has got to be very difficult if not impossible," he said.
FEELING THE PINCH
Slack sales so far this year have put the pinch on carmakers already squeezed by a strong euro, high raw materials prices and excess capacity, but the dollar's climb against the euro this year and softer steel prices are offering some relief.
The auto industry generates around 3 percent of western Europe's economic output and accounts for 7.5 percent of its manufacturing base, ACEA said.
Volkswagen, gripped in a bribery scandal that has hurt its image this month, managed to improve June registrations by 8.1 percent, aided by strong showings at its Audi luxury arm, Czech-based Skoda cars and its core VW brand.
Registrations at the BMW group jumped nearly 22 percent, tying it with Japan's Toyota Motor Corp , the world's second-biggest carmaker, at a 5.2 percent market share in June.
BMW is riding the biggest new product offensive in its history, including its well-received 1-Series compact and revamped 3-Series sedan.
This has powered it past DaimlerChrysler's Mercedes Car Group as the world's biggest maker of premium cars. DaimlerChrysler registrations edged up 0.5 percent in June, led by a 3.2 percent gain at its flagship Mercedes-Benz.
South Korea's Kia once again led growth by all manufacturers, with registrations leaping 51.6 percent last month. Its market share rose to 1.7 percent from 1.2 percent a year earlier.
Its parent Hyundai kept its market share above 2 percent by generating 14.9 percent more registrations. Both have succeeded by pitching quality cars at affordable prices.
Toyota's registrations, including its luxury brand Lexus, swelled 16.2 percent.
Other Asian manufacturers had mixed showings.
Mazda sales shrank 7.1 percent, but Honda and Mitsubishi Motors generated double-digit growth.
Market share at General Motors, the world's biggest carmaker, dipped to 11.1 percent as weaker Saab numbers offset gains by its Opel/Vauxhall brand. That still put GM ahead of Ford's 10.5 percent share after a 2.2 percent sales drop.
Ford has been hit by a weak car market this year in Britain, its most important European sales outlet.
French carmaker Renault boosted June sales by 2.8 percent, while compatriot PSA Peugeot Citroen saw registrations ease and its market share drop to 13.4 percent. Both have endured weak first-half showings in western Europe.