Statistical quirk lifts April car market in Europe

By Christiaan Hetzner

FRANKFURT, (Reuters) - Europeans continued to show only tepid interest in new cars as Italians, the continent's second-biggest car buyers, stayed away from showrooms amid a weakening economic outlook and a halt in government incentives.

April new car registrations jumped 9.6 percent to 1.42 million vehicles, according to data released by European industry association ACEA, but the gain was merely statistical with Easter falling a month earlier than a year ago.

The increase made up for a 9.5 percent drop in March and means new car registrations rose 1 percent in the first four months of this year -- almost entirely thanks to growth in the new EU markets in Eastern Europe.

"In April, most European countries benefited from two to three additional working days, which helped the majority of markets post a growth in new car registrations despite the U.S. financial crisis and further increases in fuel prices," automotive lobbying group ACEA said in a statement.

Smoothing out the April blip by looking at the year-to-date figures, Italy recorded an 8.2 percent drop in new car registrations to 867,000 vehicles while Spain -- the smallest of the big five European markets -- notched up an 11.5 percent fall to 471,000.

German automotive industry association VDA said late on Thursday that this was the fourth month in a row that registrations of new cars fell in Italy.

"The declining effect of the state-sponsored scrappage premiums combined with a stagnating economy and a considerable plunge in consumer confidence are responsible for the worsening market development," it said in a statement.

Once just a low-cost manufacturing site for automakers, Eastern Europe is becoming an increasingly important source of demand as mature markets stagnate.

Nonetheless, the brisk pace of sales there slowed in April despite the region's dynamic growth -- all the more remarkable due to the lack of Easter holidays in that month.

Romania, home of the inexpensive Dacia Logan (RENA.PA: Quote, Profile, Research), enjoyed 24 percent expansion in the first quarter only to find demand for new cars cool down fast to a growth rate of less than 1 percent last month.

Romania and Poland account for roughly half of new cars sold among the new EU states. The Czech Republic and Hungary constitute roughly a quarter by comparison.

GERMAN BRANDS SPEED AHEAD

Thanks to the statistical gains, hardly any carmaker suffered a notable loss in sales in April, but a closer look at the higher-margin western European market shows several semi-premium brands saw sales figures slide.

At Ford (F.N: Quote, Profile, Research), registrations of its Volvo Cars unit dropped 3.7 percent in April in the wealthier EU15 member states, relatively mild compared to the roughly double-digit declines incurred by Land Rover (TAMO.BO: Quote, Profile, Research), Saab (GM.N: Quote, Profile, Research) and Alfa Romeo (FIA.MI: Quote, Profile, Research).

The two main Japanese carmakers, Toyota (7203.T: Quote, Profile, Research) and Honda (7267.T: Quote, Profile, Research), were not immune to weakness despite strength in the overall market last month.

New registrations of Toyota brand vehicles edged 0.1 percent lower while luxury marque Lexus only managed to slow the pace of falling sales to 12.5 percent in April against a 24 percent drop in the first quarter.

Hondas were also less popular, falling 10.1 percent last month.

German carmakers Volkswagen (VOWG.DE: Quote, Profile, Research), BMW (BMWG.DE: Quote, Profile, Research) and Mercedes-Benz (DAIGn.DE: Quote, Profile, Research) all grew faster than the overall western European market in April, along with the Fiat brand, giving them all higher shares.