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Scrapping incentives in Western Europe drive growth
By Polya Lesova, MarketWatch
Last Update: 5:09 AM ET Nov 16, 2009
FRANKFURT (MarketWatch) -- New passenger car registrations in Europe rose 11.2% last month, as growth in Western Europe driven by fleet renewal incentives outweighed a sharp contraction in the eastern markets, according to data released on Monday.
Registrations increased 11.2% to 1.26 million in October from the same period a year ago, the European Automobile Manufacturers' Association ACEA reported.
From January to October, however, registrations dropped 5% to 12.2 million units.
In Western Europe, car registrations surged 15.8% in October to 1.2 million units.
The surge was "mostly led by an increase in the major markets and supported by fleet renewal incentives," ACEA said in a statement.
Governments in Western Europe have introduced so-called scrapping incentives to encourage consumers to trade in their old cars for new ones. However, there are worries about how the car markets will fare once these incentive schemes run out.
British new car registrations soared 32% in October, the Spanish by 26%, the German by 24% and the French by 20%.
Registrations in Eastern Europe tumble
In contrast to the west, car markets in the new member states of the European Union posted a sharp contraction in October, with registrations tumbling 37%. The Czech Republic was the only country to post growth in this region -- registrations rose 8.8%.
Elsewhere, the downturn ranged from a decline of 8.4% in Poland to a collapse of 81.6% in Latvia, which is gripped by a dramatic economic crisis.
From January to September, registrations have dropped 30% in the new E.U. member states, ACEA said.
Among individual car makers, Germany's Volkswagen Group posted a 6.3% increase in its group registrations. Its Volkswagen brand posted growth of 8.4% and Skoda surged 33%, offsetting a 12% decline in the high-end Audi brand.
Registrations at French car maker Renault SA soared 34%, while those at Italy's Fiat rose 16%.
German luxury car maker BMW Group saw its registrations drop 9%, with the BMW brand posting a decline of 14%.
At General Motors, total registrations were up 11.5% in October, with registrations at the Opel/Vauxhall brands up 12.6% during the month. The Chevrolet brand was up 38%, while Saab registrations tumbled 65%.
GM is scheduled to release its third-quarter preliminary results on Monday at 7 a.m. Eastern. The troubled car maker decided recently not to sell a majority stake in its European operations to a consortium of Canada's Magna International Inc. MGA and Russia's Sberbank.
Nick Reilly, GM's president of international operations, will lead the Opel and Vauxhall businesses during a search for a new chief executive officer. It remains unclear how GM is going to fund the restructuring of Opel.
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