The European car industry continued to grow in January 2017 with new car registrations for the month totalling 1.2 million units, up 9.4% on January 2016.

All of Europe’s largest five markets posted an increase in registrations in January.

The figures from JATO Dynamics show this is the second highest result for January in a decade, credited to an increased number of promotions and incentives across the 29 markets analysed.

All of Europe’s largest five markets posted an increase in registrations, with Germany experiencing the highest increase of 10.5%, which was attributed to improved economic conditions and consumer sentiment, combined with lowered interest rates.

France came in second, posting an increase of 10.4%, helped by two more working days in the month, increased sales to rental companies, and brands registering stock vehicles in January.

Meanwhile, Spain, Italy and the UK all posted increases of 8.4%, 10.1% and 2.9% respectively. A key factor in the UK growth may be consumers rushing to make purchases before the Brexit process gets underway, amidst claims that prices will rise due to the sinking pound, along with new Vehicle Excise Duty (VED) car tax rules from April onwards.

Among the 29 markets analysed, the Netherlands experienced a significant 26.6% increase in registrations. This was partially due to a shift in tax policy, with many dealers registering cars last month, to benefit from the new lower tax rate of 22% which came into effect in January 2017 (compared to the previous tax band of 25%).

Volkswagen led the brand ranking, although it is growing at a slower rate than the market average as the brand’s traditional models, such as the Golf and Polo, were overtaken by newer rivals. The Tiguan, Europe’s best-selling SUV, helped boost the brand’s performance.

The Volkswagen Golf maintained its lead, and sales remained stable, but the model is losing ground to its rival – the Astra. However, Volkswagen’s recently updated Golf is expected to revitalise its sales over the upcoming months.

For more of the latest industry news, click here.