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EU up 10.8% on car sales in March

The number of cars sold in the EU in March increased by 10.8%, suggesting that the economy is slowly but surely picking up.

The sharp increase was due to a total number of 3,671,871 new cars being registered in the EU during March. Despite the increase in VAT, the UK accounted for almost 400,000 new cars, 26.6% more than in 2009, thereby becoming the largest EU market.

First-quarter sales in 2010 were 9.2% up on the same period in 2009, but are still 9.4% lower than EU-wide registrations for the first three months of 2008.

March is traditionally the strongest selling period for new cars due to the new year registration plates and the Society of Motor Manufacturers and Traders (SMMT) say it expects sales to fall now that the UK's scrappage scheme has finished. The scrappage scheme, which offered new car buyers a £2,000 discount if they scrapped a car older than 10 years, accounted for 12.2% of registrations in March, before coming to an end.

Government figures show that at least 330,000 cars were sold under the scheme, providing a much needed boost to the UK car industry. However, the latest sales figures are still well below the levels seen in 2008.

The overall increase throughout the EU is partly driven by most car industries being helped by government incentive schemes. In contrast, the German market shrunk, with sales plunging by 26.6% to just 294,375 vehicles being sold, after its generous "cash for clunkers" scheme ended last September.

Key country car industry growths;

• UK (+27.3%)
• France (+16.9%)
• Germany (-22.8%)
• Italy (+23.3%)
• Spain (+44.5%)

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