June 17, 2014 / 6:57 AM / 3 years ago

European car sales up 4.3 percent in May on volume brands

Renault automobiles are seen at a dealership of French car maker Renault in Haguenau, North Eastern France, January 21, 2014. REUTERS/Vincent Kessler

BERLIN (Reuters) - Europe’s car sales rose 4.3 percent in May as volume brands Skoda, Renault and Opel posted stronger growth than premium marques BMW and Audi, according to registrations data published on Tuesday.

Europe’s car market has shown signs of recovery from a six-year slump, but excess production capacity, heavy discounting and incentives continue to distort the true level of demand.

Registrations in the European Union and the countries of the European Free Trade Association (EFTA) increased to 1.13 million cars last month, from 1.09 million a year earlier, the Association of European Carmakers (ACEA) said.

Though the data showed that demand for passenger cars in the EU increased for a ninth straight month, the level of deliveries was the second lowest for a month of May since 2003, ACEA said.

Five-month sales in the region of 30 countries excluding Malta were up 6.6 percent at 5.62 million cars, compared with 5.27 million in 2013. Four of Europe’s five biggest markets kept growing in May, with gains of 5.2 percent and 7.7 percent in Germany and the U.K. offsetting a 3.8 percent drop in Italy.

Deliveries surged in the region’s southern markets that were hit by the previous economic recession, with growth of 17 percent in Spain, 37 percent in Portugal and 42 percent in Greece. Sales jumped 23 percent at VW’s Czech division Skoda, 16 percent at the Renault brand and 6.2 percent at Opel, part of General Motors. Conversely, deliveries at the world’s two largest luxury automakers BMW and VW’s Audi rose just 1.4 percent and 4.8 percent.

Reporting by Andreas Cremer; Editing by Christoph Steitz and Sophie Walker

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