French auto sales show signs of stabilization

Reuters - France's auto sales fell less sharply in April giving hope to carmakers that their market is stabilising amid mixed signals for Europe's second-largest economy.

French light vehicle registrations dropped 1.3 percent to 200,806 last month, with PSA Peugeot Citroen deliveries rising and Renault's falling, the country's CCFA industry association said in a statement on Wednesday. This followed a 22 percent year-on-year plunge in March.

Firmer demand for delivery trucks and cars for company fleets were among "signs of an economic turnaround", CCFA spokesman Francois Roudier said. "Things are picking up reasonably well."

U.S. auto sales rose 2.3 percent in April, according to Autodata Corp figures published on May 1, as the broader economy showed signs of strength.

April's auto market improvement was also enhanced by the after-effects of government sales incentives that had boosted small-car deliveries through March 2011. The year-on-year comparison was the first since December 2008 that was unaffected by the subsidies, Roudier said.

Sales may be bottoming out after a 16 percent fall for the first four months and appear on track to meet the group's full-year forecast of an 8-10 percent market contraction, Roudier added.

Both French automakers have underlined efforts to draw down stocks of unsold vehicles, which means a sales recovery could take months to make itself felt on the factory floor.

Separate survey data released on Wednesday showed that overall French manufacturing shrank for a second month in April, with orders falling at the fastest pace in three years.

France's main consumer confidence index has meanwhile been edging higher from a December low of 81 and rose one point to 89 last month, according to national statistics office INSEE.

Peugeot's April registrations increased 8.7 percent to 65,296 cars and delivery trucks, helped by more than 3,700 deliveries of its new Peugeot 208 small car, the CCFA said.

Smaller domestic rival Renault, whose Clio mini is awaiting a replacement later in the year, recorded a 5.8 percent decline to 49,303 vehicles.

European market leader Volkswagen, which had in recent months gained ground on the French car makers in their home market, recorded a 4.9 percent April sales decline in France, as deliveries by its no-frills Seat brand plunged by one-third.

Italian auto sales figures for April are due to be published later on Wednesday, with German data to follow on Thursday.