Slim Gain in Car Sales Leads to Optimism, and Skepticism, in Europe

FRANKFURT — Europe suffered another month of dismal car sales in September. But the numbers were a little less grim than a year ago, nurturing hopes that the market had finally hit bottom. And a sales rebound in Spain showed the effects of a United States-style “cash for clunkers” government stimulus program.

Auto sales in the European Union, as measured by new registrations, rose 5.4 percent in September compared with September 2012, the largest increase in more than two years, the European Automobile Manufacturers’ Association said on Wednesday. Ford and General Motors, which have lost billions in Europe in recent years, were among the manufacturers that sold more cars in September than a year earlier.

But the overall gain was less impressive than it sounded, reflecting the fact that it compared with September 2012, the worst month for European car sales in recent history. There were also some special factors that helped sales this September, including an extra working day and the Spanish government’s incentive program, which offers buyers up to 2,000 euros, or $2,700, when they trade in an older model for a more fuel-efficient new car.

Car sales in Spain surged 28.5 percent compared with September 2012, according to Anfac, the Spanish association of carmakers.

But Javier Díaz Zúñiga, head of sales at a car dealership on Madrid’s Príncipe de Vergara thoroughfare, was not impressed by the data showing a jump in Spanish car sales.

“People attach way too much significance to such a figure — and politicians then go on to publicize the conclusion that Spain is doing much better,” he said. The government’s incentive plan — the third since the start of the crisis — was “timely, but wait until you see sales drop back down again once it expires,” Mr. Díaz Zúñiga added.

In fact, Spain’s car market recovery has been more evident at the production level, with Ford and other carmakers recently expanding their presence there because of lower labor costs, while closing or downsizing factories in European nations like Britain and Belgium. On Wednesday, Anfac forecast that Spain’s car production would climb next year to 2.4 million cars, from 2.2 million in 2013.

Still, the broader European figures are likely to bolster those in the industry who argue that the car market has hit bottom and could begin to rebound gradually. And an increase in car sales bodes well for the larger European economy, suggesting that consumers are becoming more confident and willing to spend.

“On sheer volumes, Europe is not in brilliant shape,” Carlos Da Silva, an analyst at IHS Automotive, said. “Yet the underlying trend of the market is calling for a certain dose of optimism.”

Mr. Da Silva said, however, that any rebound would not be vibrant enough to solve problems of companies like PSA Peugeot Citroën of France, which has too much manufacturing capacity for the market and faces enormous political resistance to job cuts and factory closings.

“They will be in dire straits for a long time,” he said

About three million Europeans work in car factories or companies that make auto components, according to the manufacturers’ association, and the fate of the industry is closely intertwined with the broader economy. The September increase will reinforce expectations that the euro zone economy, which emerged from recession in the second quarter of this year, is recovering gradually.

Any rebound in car sales is likely to be weak, though, and there may be questions about how lasting it will be.

Many European countries used incentive programs similar to Spain’s to prop up sales in 2009, when Europe suffered a sharp recession. But when the programs ended, car sales plunged to depths not seen in 20 years.

Despite the caveats, Rabih Freiha, an auto analyst at Exane BNP in Paris, said there were some grounds for optimism. He said the report showed that the broad European market, which included the 27 European Union nations and Norway, Switzerland, Iceland and Liechtenstein, grew in September at an annualized rate of 13 million vehicles, the best showing since March.

“That’s still a healthy improvement, and it’s better than we’d expected at the beginning of the year,” Mr. Freiha said.

Jack Ewing reported from Frankfurt and Raphael Minder from Madrid. David Jolly contributed reporting from Paris.