French brands make hay while sun shines on Euro car market

French car makers, and Peugeot in particular, will be heartened by figures released this week which show that the market for new cars in Europe is continuing to grow. Sales grew by around 8 per cent in February, compared to a year earlier, rising to 894,730 vehicles.

PSA Peugeot Citroën made some of the greatest gains as demand for its new 308 hatchback (below) saw sales rise by 3.5 per cent across the group, and 7 per cent for the Peugeot brand.

Peugeot is having something of an interesting week. Incoming CEO Carlos Tavares has said that he intends to trim the group's model ranges to improve productivity and profit, while Peugeot itself has said that it will take on more than 600 new staff at its Sochaux plant near Paris to increase production of the 308 to meet demand.

Meanhwile, Dongfeng Motor CEO Zhu Fushou has said that his firm's €800 million investment in PSA does not mean that China will come to dominate the company. Zhu was referring to a question in a press conference asking whether the dragon (meaning China) would swallow the lion (meaning Peugeot). Zhu denied that this would be the case but said nonetheless that the two companies want to jointly "conquer" the Asia-Pacific region.

Other companies doing well again in Europe include Renault (sales up 11.5 per cent, with Dacia sales up a whopping 34 per cent), Ford (also up 11 per cent with Fiesta and Kuga doing well with European buyers), Opel (up 16 per cent), Fiat (up 5.8 per cent ) and Toyota (up 14 per cent).

There was mixed news on the German front, though. BMW and Mercedes sales both rose by 4 per cent but Volkswagen saw a fall in registrations. Skoda and Audi both posted increases, but VW-badged sales actually fell by 0.8 per cent.

There were also warnings that much of the new sales rise is being driven by sharp discounting of new models. Speaking to Automotive News, Hyundai Europe's divisional head, Allan Rushforth, said: "The industry is still faced with record-high incentive levels and artificially inflated sales . . . it's too early to be celebrating a recovery in the European car market."