European scrapping schemes driving small car sales

According to a new study by Jato Dynamics, the European automotive market may be rebounding ever so slightly from its alarming lows of early 2009. Though new car purchases are down by just over 13 percent year-on-year, there was actually a mild 2.4 percent improvement in May over April. Says David Di Girolamo, Head of Jato Consult:

If Germany (up 39.7-percent from May 2008) provides a template for the other markets where scrappage schemes have been introduced, we may be at the very beginning of a period of recovery in Europe. It's far too early to know what the sustained effects of the incentives will be, but at a time when the industry needs to see some rays of hope, it's encouraging to witness some improvement.

Interestingly, small, fuel efficient hatchbacks are performing better than the rest of the market, which is thought to be due to the various scrapping schemes in Europe. The redesigned Ford Fiesta is up an impressive 56 percent and the VW Golf is up 32.1 percent over last May. The Fiat Punto and Panda and VW's Polo also posted better sales last month over May of 2008.

[Source: Channel 4]