A 6 percent September increase in European car sales raised hopes that the region is emerging from its slump, but automakers and governments are still propping up demand.
Registrations in the European Union and European Free Trade Agreement markets increased to 1.19 million vehicles last month from September 2012, industry association ACEA said in a statement.
ACEA said nine-month sales fell 4 percent to 9.34 million cars. Industrywide sales in the region are still on track to reach a two-decade low this year in the sixth consecutive annual contraction.
The end of an 18-month euro-area recession helped to boost demand last month. Gross domestic product of the 17 countries using the euro returned to growth in the second quarter.
Growth in the United Kingdom, France and Spain helped drive September's sales increase. In Spain, where the government offers as much as 2,000 euros, or about $2,700 at current exchange rates, in discounts on trade-ins of older models, new-car registrations rose 29 percent.
Among automakers, Daimler sales were up 12 percent in September, led by a 14 percent increase in Mercedes-Benz sales. Other automakers posting increases included BMW Group (6 percent), Toyota Motor Corp. (6 percent), Volkswagen Group (6 percent), General Motors (5 percent) and Ford Motor Co. (5 percent). Fiat Group sales fell 3 percent.
Peter Fuss, senior advisory partner for the automotive sector at Ernst & Young, said the market shows "signs of recovery in demand."
But, Fuss said, sales "continue to be artificially boosted by huge discounts and self-registrations by dealers. It will be at least two years before the market [is] strong enough to grow on its own without the aid of incentives." c
Automotive News staff, Bloomberg and Reuters contributed to this report.