January 28, 2014 / 5:47 PM / 4 years ago

European car sales to end six-year decline

BRUSSELS, Jan 28 (Reuters) - Europe is set to end six years of falling auto sales in 2014 with a 2 percent increase in passenger car registrations, the Association of European Carmakers (ACEA) said on Tuesday.

New car registrations in the European Union fell 1.7 percent last year to 11.85 million, the lowest level since 1995, when the EU had only 15 countries compared with 28 now.

However, 2013 ended on a brighter note. Sales grew in each of the last four months, finishing with a 13.3 percent jump in December to help keep the annual decline lower than forecast at the start of the year.

The market is expected to make a gradual recovery in 2014, with 1.4 percent growth in European Union GDP translating into a 2 percent increase for the auto sector, Philippe Varin, ACEA president and CEO of PSA Peugeot Citroen, told a news conference .

“This would mean hovering around or just above the 12 million units mark,” Varin said, adding that the level had been almost 16 million in 2007.

Varin said he expects the German and French markets to recover after declines of 4.2 percent and 5.7 percent respectively and Britain to be in good shape after 10.8 percent growth in 2013.

Spain, with a 3.3 percent rise, is also recovering, while Italy should bottom out after a 7.1 percent drop.

Total motor vehicle registrations last year fell by 1.4 percent to 13.6 million. Production in 2013 is estimated at 16 million vehicles, compared with 19.7 million in 2007.

The ACEA also set out four focus areas for policymakers: innovation, growth through trade, regulatory support and managing change. The last of these is to address the need to smooth restructuring initiatives and increase labour flexibility.

The association insists all four are required to rebuild the competitiveness of the sector.

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