What European car sales are saying about the European economy

As a big discretionary spending item, it is always interesting to see what is happening in passenger car registrations.  The good news, is that the numbers showed the first back-to-back rise in EU new passenger car registrations over the last year. 

Dig into a little bit of detail though and some other trends become apparent.  Yes the October year-on-year statistic may be up but take a look at the full 2013 YTD statistics versus the equivalent in 2012...down 3.1%.  Hmm.  Not so good.  October 2013 at just over 1m sales was a very average month given 10m sales in the first 10 months of this year - even with the boost from sales subsidies in Spain.

And look at the detailed country breakdown too.  Take away the UK sales and sales in the rest of the EU27 were down over 5% in the comparable YTD period...interestingly about equivalent to the trend in the powerhouse German economy. 

And why are UK sales so strong?  A recovering economy, signs of green shoots that can soon be transferred to the rest of Europe?  Let's not forget this story from a few weeks ago:

'the Weekend FT noted that in the UK:

Credit accounted for 74.5 per cent of new car purchases in the 12 months to August, a sharp

rise on the pre-recession norm of about 50 per cent, helping to push sales to levels not seen for
five and a half years'.

So...whilst it is good to see two successive year-on-year sales increases, the underlying trend in one of Europe's biggest discretionary consumer spends remains pretty poor.  Again, I think we can see why Mr Draghi reduced interest rates a couple of weeks ago.