The data from the European Automobiles Manufacturers Association (ACEA) shows that registrations during the month grew by 16.0% compared to May 2015, reaching 1,288,220 units. The total units registered was close to the figure for May 2008, just before the economic crisis hit the automotive industry.

Among the major markets, Italy (+27.3%), France (+22.3%), Spain (+20.9%) and Germany (+11.9%) all recorded strong performances with double-digit percentage gains. The UK market also grew (+2.5%) last month, although at a more modest rate.

For the year to date, registrations were up by 9.9%, totalling 6.4 million units. All major markets posted growth, contributing to the overall upturn of the EU market. The Italian (+20.5%), Spanish (+12.5%) and French (+10.5%) passenger car markets saw double-digit growth over the period, followed by Germany (+6.8%) and the UK (+4.1%).

Looking ahead, the ACEA said it’s expected that the market will maintain its positive momentum. For the full year 2016, ACEA recently revised its forecast to 5% growth.

IHS Automotive commented on the figures, with Carlos Da Silva, manager of the company's European light-vehicle sales forecast, highlighting calendar benefits, with some markets experiencing up to three additional selling days, but said even with this taken into account, “the overall trend of the market remains virtually unchanged with regards to its upward trajectory”.

He added: “This continues to be fed by a release of pent-up demand, most notably in Southern European markets, from when both private and corporate customers were unable to justify replacing an existing vehicle. This decision is now partly forced by current vehicles becoming so old (reflected in the fast rising car parc ages in the region) that there was little alternative to renew.”

However, Da Silva added that on its own this still does not explain the full extent of the market's current momentum, and points to the fact that Europe has been benefiting from a “quite spectacular and, frankly, unbelievably good microclimate lately”. He noted: “On the one hand, at macro level, the situation is still depressing on absolute terms such as GDP, unemployment, investment, but on relative terms the gains are sufficient enough to impulse a much more optimistic cycle.” Other benefits that have also favoured the market for some time include low oil prices, inflation and interest rates, the latter contributing to very competitive finance deals.

He concluded: “Europe should keep growing as it benefits from strong tailwinds but this is not saying that the sky is totally blue without any cloud on the horizon.” Overall, IHS Automotive anticipates that registrations of passenger cars in EU+EFTA will increase by around 5% y/y during 2016 almost 14.97 million units, up from a low of 12.36 million units seen in 2013. It also anticipates weaker gains towards the end of the decade when levels are expected to peak at over 15.2 million in 2019.