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Toyota, Fiat lead first European sales gain since May

Toyota Motor Corp., Fiat SpA and PSA Peugeot Citroen last month led the first gain in European car sales since May as they offered discounts to customers and attracted buyers to models released over the past year.

Sales rose 3.6% from a year earlier to 1.21 million vehicles, the Brussels-based European Automobile Manufacturers Association said in a statement today. Registrations for the first 10 months of the year advanced 0.4% to 13.1 million units. “The gains show the strongest performers are those with the most recent model range supported by aggressive pricing and marketing efforts,” said Thomas Ryard, an Amsterdam-based automotive analyst at Global Insight, a consulting company. Toyota and Fiat discounted cars and found buyers for models such as the Japanese automaker's Yaris subcompact and RAV4 sport- utility vehicles and Turin, Italy-based Fiat's Grande Punto subcompact. Peugeot rose on rebates and on demand for cars such as the small 207 hatchback, which reached dealers in May. The October gain is probably just a blip in what will be a year with sales little changed, said Peter Schmidt, managing director at Automotive Industry Data, a consulting company in Warwick, England. “It is the balance between rebates and new product that makes this industry in Europe, where you have to scratch tooth-and-nail for sales and market share,” he said. “If it weren't for incentives this year, the market would have been significantly down from last year.” Peugeot offers €2,000 ($2,561) in savings on a 307 compact in France. Fiat has savings of €910 on the Grande Punto while Volkswagen in the UK is offering Ł1,025 ($1,941) off of a Touran van. Global Insight's Ryard said that Toyota is leading discounts in the Netherlands, offering 9% off of most vehicles, and that several brands in Germany are offering discounts of 16% on many models, equal to the value-added tax. “These incentives are really pushing the market in places like Germany,'' Ryard said.

European unemployment also remained at a five-year low of 7.8% in September, the European statistics office in Luxembourg said on November 3. Europeans' confidence in the economy rose to a five-year high in October and inflation slowed as declining oil prices increased the spending power of consumers and companies, the European Commission said on October 31. “This year's result, although positively influenced by one extra working day with respect to October 2005 across the whole region, is a sign of recovery after four consecutive months of decline,” the carmakers' association said.

Fiat's European market share through October jumped to 7.5% from 6.4% a year earlier. Its October sales rose 16% to 92,704 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. Toyota's sales increase bumped its October market share to 5.7% from 5.1% 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. The company last week also bought a stake in Isuzu Motors Ltd. to gain access to a range of small diesel engines to strengthen its expansion in Europe. Half of new cars sold in Europe are powered by diesel engines, according to the French carmakers association. Toyota in September said it expects to sell 1.3 million vehicles in Europe by 2008, up from 964,208 in 2005. Through October, Toyota's sales are up 9.9% to 764,451 vehicles, raising its market share to 5.9% from 5.3%. The unit sales and market share gains trail only Fiat and Volkswagen AG this year and contrast with sales and market share declines at Peugeot, Renault SA, General Motors Corp. and Ford Motor Co. October sales for Peugeot, the second-largest European car manufacturer and France's largest, bucked the downward trend for the company this year, posting a 7.1% gain. The company sold 166,363 units last month as sales in its domestic market rose. Wolfsburg, Germany-based Volkswagen's sales increased 4% to 255,569 cars and sport-utility vehicles. Last month's growth at Volkswagen, Europe's largest carmaker, included a 2.1% increase in the namesake brand to 137,042 vehicles and a 5.3% increase at the luxury Audi division. The group market share in Europe rose to 20% through October from 19.1% a year earlier. GM, the world's largest automaker, reported a 5.4% gain in European sales last month to 118,227 vehicles. The Detroit-based carmaker is counting on the introduction of a new version of the Opel Corsa subcompact, released last month, and the expansion of its Chevrolet division to win new customers. Sales at Ford Motor Co. rose 4.5% to 123,771 units. Renault, Europe's fifth-largest manufacturer, posted a 2% drop. The French carmaker sold 111,949 vehicles last month, leading to a drop in market share to 9.3% from 9.8%. European sales at Nissan, Japan's second-largest automaker, jumped 16% last month to 21,715 vehicles, with sales through October down 16% to 270,412 units. Carlos Ghosn, who heads both Renault and Nissan, in August presented the Qashqai sport utility vehicle for Nissan in Europe. DaimlerChrysler AG, which includes the Mercedes-Benz and Smart brands, sold 8.2% fewer cars in the region last month. The company sold a total of 74,007 vehicles in October and 772,630 cars and lights trucks from January through October. Bayerische Motoren Werke AG, the world's largest maker of luxury cars, sold 57,241 vehicles, a 3.9% drop from a year ago. (Bloomberg)