– Corrects Headline to Read Rise instead of Decline –

FRANKFURT (MNI) – Passenger car registrations in the Eurozone were
6.9% higher on the year in March, more than doubling February’s annual
gain, the European Automobile Manufacturers’ Association (ACEA) reported
Friday.

In the EU15, which includes Sweden, the United Kingdom and Denmark,
but excludes Slovakia and Slovenia, registrations rose 11.9% on the year
in March.

Among major Eurozone countries, German registrations fell 26.6% on
the year in March. For 1Q, German car registrations were 22.8% lower
y/y.

These data reflect the base effect of the government’s car
scrapping program last year, which spawned massive increases in
registrations of new vehicles.

When compared to 2008, however, 1Q registrations were only down 9%,
industry association VDIK reported earlier this month.

French car registrations gained 17.9% on the year in March. This
was mainly due to the registration of new car orders made late last
year, just prior to the reduction of the country’s scrapping premium to
E700 from E1000. The base effect of weak car sales at the beginning of
last year also played a role in March’s gain.

Italian car registrations were 19.6% higher on the year in March,
and in Spain registrations were 63.1% above last year’s total. Both
countries introduced scrapping schemes to offset the effects of the
recession. While Italy’s has already ended, Spain’s is set to continue
until the end of September.

The end of scrapping premia and concerns about unemployment across
Europe are expected to subdue purchases of cars and durable goods this
year.

Still, consumer morale may not be as bad as once feared. For
example, Germany’s forward-looking GfK consumer confidence indicator
remained stable in April after five straight months of decline.

“Increasing signs of recovery” in Germany and the absence so far of
“generally feared severe job reductions” have “clearly somewhat allayed
Germans’ anxieties about redundancy,” GfK explained.

Nevertheless, the group noted that rising petrol prices is
depressing Germans’ desire to buy.

The end of the scrapping premium as well as concerns about
unemployment and weak personal income gains will likely weigh on new car
purchases in France looking forward, this despite dealers’ efforts to
offer discounts to supplant the recently ended government incentives.

–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com

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