European Car Sales Surge In November

Sales of new cars in Europe rose 26.6 percent in November from a year ago as government cash handouts encouraged people to ditch clunkers for more fuel-efficient models.

BRUSSELS (AP) -- Sales of new cars in Europe rose 26.6 percent in November from a year ago as the economy recovers and government cash handouts encouraged people to ditch clunkers for more fuel-efficient models, the EU car makers association ACEA said Tuesday.

Car makers Renault SA and PSA Peugeot Citroen SA saw sales surge as car buying picked up in their home market, France, by 48 percent.

Renault saw sales gain 46.6 percent over the year, to sell 130,807 -- outpacing near rivals Ford Motor Co. and General Motors Corp. -- while Peugeot Citroen SA posted 38.7 percent growth to sell 158,900 cars.

Volkswagen AG, Europe's best selling car maker, saw sales increase only 16.6 percent to 248,612. Sales were nearly flat at its luxury line, Audi, as customers opted for smaller, cheaper cars. Other high-end German car makers, BMW AG and Daimler AG, also saw a smaller gain in sales of about 9 percent each.

Strong sales this fall fail to fully compensate for a slow year. Some 1.18 million cars were sold in Europe in November -- and some 13.8 million over the year to date, down 2.8 percent from January-November 2008, ACEA said.

It says sales are bolstered by government cash-for-clunkers programs and worries that sales could fall off quickly when those handouts end. That doesn't seem to be the case in Germany where the program ran out of cash in September. Sales still climbed 29 percent in November.

However, the end of a low-rate value-added tax at the end of this year may be encouraging British car buyers to purchase now instead of in the new year. British car sales shot up by 57.6 percent in November -- more than any other country.

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