French car sales rise 6.1% in March

Reuters (Paris) - French new passenger car sales rose 6.1 percent in March, auto makers' association CCFA said on Friday, as the market benefitted from an expiring programme allowing car owners to trade in their old models for new.

March was the last month expected to show the incentive scheme's effects, as cars bought before the programme expired in December could be registered until the end of March.

The scrappage scheme, like similar ones launched in many other markets, boosted car sales after the industry was hit by a savage downturn.

Blain said he expected the French auto market to perform better than expected in 2011 after a "very satisfying" first quarter, adding that he saw the market declining 8 percent for the year compared with a previous forecast for a 10 percent dip.

Blain said he saw no major impact on the French car industry in March or April from the wider supply chain problems that have roiled the industry after the Japan earthquake, tsunami and nuclear crisis.

A spokeswoman for Renault said its production had not yet been impacted, apart from at a Renault Samsung facility in South Korea, but that the company was analysing the situation closely.

PSA Peugeot Citroen's (PEUP.PA) March sales rose 13.5 percent while group sales at Renault (RENA.PA), where supply problems have hit some models since the beginning of the year, fell 12.4 percent.

Renault brand sales fell 8 percent in March, while low-cost Dacia brand sales which have boomed in recent months plunged 26.5 percent.

CCFA President Patrick Blain told a news conference supply problems were to blame for the dip.

The Renault spokeswoman said some suppliers who cut capacity because of the industry crisis had not anticipated such a speedy recovery in demand and were not able to ramp up production accordingly.

The Twingo, Clio Campus, Modus, Megane and Dacia's Sandero models were affected, and Renault would be compensating 3,000 customers who had not been eligible for the scrappage scheme because of the delay, the spokeswoman said.

Low stocks of vehicles also contributed to the problems in delivering vehicles, she said. Car makers moved to slash their inventories of vehicles when the crisis hit, leaving them overloaded with cars they could not sell.

257,631 new passenger cars were registered overall in France last month, the CCFA said in a statement.

In the first three months of the year, passenger car sales rose 8.9 percent.

Sales of light commercial vehicles rose 4.7 percent last month, and 8.6 percent in January to March, the CCFA said.