Are you sure?

European car sales gain before increase in German tax

Germans led a second consecutive monthly gain in European car sales in November, buying models from Volkswagen AG and Ford Motor Co. ahead of a tax increase that will add an average of €700 ($920) to prices next year.

Sales rose 3.9% from a year earlier to 1.22 million vehicles, the Brussels-based European Automobile Manufacturers Association said in a statement today. Sales in Germany, Europe's largest market, jumped 18% to 326,038 units. Value-added tax in Germany will rise to 19% from 16% on January 1. Volkswagen, DaimlerChrysler AG and competing German carmakers' domestic 2007 sales may be little changed as the tax increase counters the benefits of new models and the lowest unemployment rate in four years, the German carmaker's association said on December 5. The €700 increase in sticker prices may cause purchases to rise at the end of this year and stall early next year, said Bernd Gottschalk, president of the association. “The German demand helps everyone who has a good share of the market there,” said Thierry Huon, an automotive analyst at Exane BNP Paribas in Paris. “There is definitely the risk that sales will reverse early next year.” European sales for the first 11 months of the year rose 0.8% to 14.3 million, the association said. Wolfsburg, Germany-based Volkswagen's sales increased 11% to 266,737 cars and sport-utility vehicles. Last month's growth at Volkswagen, Europe's largest carmaker, included a 12% increase in the namesake brand to 144,813 vehicles and a 12% gain at the luxury Audi division.

The group's market share in Europe rose to 20.2% through November from 19.2% a year earlier as customers pick up Passat midsized sedans, Audi Q7 sport-utility vehicles and Skoda Roomster models. Ford, which has its European headquarters in Cologne, Germany, posted a 9.7% sales gain last month to 128,325 vehicles. The company is benefiting from demand for the S-Max minivan. Ford yesterday reorganized its management at its Dearborn, Michigan, headquarters and said Lewis Booth, head of Ford in Europe will report directly to CEO Alan Mulally. Fiat SpA's European market share through November jumped to 7.6% from 6.5% on demand for the Grande Punto subcompact and as Italian car sales increased. Its November sales rose 15% to 95,225 cars. In addition to the Grande Punto, the Alfa Romeo 159 sedan, introduced at the end of 2005, contributed to the gains. Fiat will release the Bravo compact model early next year. The Italian car market grew 6.2% last month.

Toyota's 11% sales increase last month to 69,079 units bumped its November market share to 5.7% from 5.3% a year earlier. In addition to the Yaris, the Toyota City, Japan- based carmaker released a new version of the RAV4 sport-utility vehicle this year. Toyota in September said it expects to sell 1.3 million vehicles in Europe by 2008, up from 964,208 in 2005. Through November, Toyota's sales are up 10% to 833,488 vehicles. November sales for PSA Peugeot Citroen, the second-largest European car manufacturer, posted a 2.5% gain to 158,024 vehicles. Renault, Europe's fifth-largest manufacturer, posted an 18% slide to 92,908 units as demand for its cars in its home French market slumped. Unemployment among the dozen countries that share the euro also fell to a five-year low of 7.7% in October, the European statistics office in Luxembourg said on December 1, and Europeans' confidence in the economy stayed close to a six-year high in November and the European Commission on November 30 said growth in the euro area will accelerate to about 0.6% in the first two quarters of next year from 0.5% in the third and fourth quarters of 2006.

GM, the world's largest automaker, reported a 0.4% gain in European sales last month to 127,134 vehicles. The Detroit-based carmaker is counting on the introduction of a new version of the Opel Corsa subcompact, released in October, and the expansion of its Chevrolet division to win new customers. DaimlerChrysler AG, which includes the Mercedes-Benz and Smart brands, sold 6% more cars in the region last month. The company sold a total of 82,477 vehicles in November and 852,871 cars and lights trucks from January through November. Bayerische Motoren Werke AG, the world's largest maker of luxury cars, sold 62,820 vehicles last month, a 0.6% increase from a year ago. (Bloomberg)