For Spain, the gains for the passenger car market continued in February on the back of the Plan Industrial del Vehículo Ecológico (PIVE) scrapping incentives which are now well into their seventh round. According to data published by Spanish trade association ANFAC, registrations this month have grown by 26.1% y/y to 86,717 units. Combined with the gains in January, the year to date (YTD) so far stands at 154,836 units, an improvement of 26.7% y/y.

The Italian passenger car market also gained in February by 13.2% y/y. According to the latest data released by trade association ANFIA, registrations during the month increased from 118,976 units to 134,697 units, taking sales in the YTD to 266,555 units, an increase of 12.3% y/y.

Commenting on the figures, IHS said that the Spanish passenger car market has grown for the 18th month in succession and according to the trade association, this is the highest figure for a February since 2010.

It added: “The incentives to bring private customers in to the market over the past couple of years have once again helped to lift registrations this month. The number of this type of customer has grown by 24.9% y/y to 44,956 units. However, registrations of vehicles bought by non-private customers are also improving significantly. The number of company cars, for example, have increased by 24.3% y/y to 19,465 units, while those sold to rental companies have leapt by 30.4% y/y to 22,266 units, in preparation for the holiday season.

“These improvements will be partly underpinned by the increasingly broad-based economic recovery, which in 2015 will be helped by a weaker euro to aid the export sector, lower energy costs reducing household bills, and a cut in both personal income taxes and corporate tax rates to increase both consumer spending and business investment.

“Nevertheless, several risks to the recovery continue to be present and need to be mitigated. High unemployment levels have been trending slightly downwards and the banking sector continues to recover as credit conditions remain limited despite low interest rates. The expectations for private demand of new vehicles would have been much lower were it not for the incentives and attractive financing packages launched by autos retailers and the looming question will be whether the government chooses to extend these incentives yet again.”

IHS Automotive said its expectations for 2015 see demand growing by around 7.0% y/y to 912,000, and the gains are expected to continue until at least the end of the decade, with the 1-million-unit mark breached in 2018. Nevertheless, sales remain below the peaks over the past decade and seem unlikely to reach those levels again, as the market finds a naturally lower plateau.

Meanwhile double-digit percentage gains in the Italian passenger car market during January have continued in February.

IHS added: ANFIA has suggested that the positivity bodes well for the coming months as private and business customers increase in confidence. It notes in the latter group that rental fleets are being bolstered in preparation for the 2015 Milan Expo (Italy) which will occur between 1 May and 31 October. The growth in confidence is also helping long-term contracted fleet vehicles; typical contracts were extended from 36 months to 48 months and vehicles are now being replaced. However, there are said to have been restrictions on the issuing of plates which has delayed deliveries. Nevertheless, orders are rising, with 17% more having been taken this month than in February 2014.”

IHS Automotive addedhtat currently expects that the Italian passenger car market will grow by around 4.5% y/y in 2015 to 1.43 million registrations, with an even larger gain anticipated in 2016 that will continue until the end of the decade. Even so, the number of registrations made will be considerably below the previous decade, with little sign that it will be close to returning to these highs in its current forecast visibility.