European automakers lead gains for benchmarks around the region Wednesday after stronger-than-expected sales data and increasing positive signals from key markets in China.
Car registrations for the month of March jumped more than 11% from last year, according to figures from the European Automobile Manufacturers' Association (ACEA), taking the first quarter total to 4.26 million units. Toyota Motor Co (TM - Get Report) , Fiat Chrysler (FCAU - Get Report) and Nissan Motors (NSANY) led the gains, posting high double-digit increases for the month, according to AECA tables. European manufactures saw slightly more modest gains, with Volkswagen AG (VLKAY) notching a 6.2% advance and French rivals Renault (RNLSY) and PSA Group (PUGOY) growing sales by 14.4% and 6.7% respectively.
Market reaction to the figures, however, was robust across the board, with VW again topping the DAX performance index with a 2.4% gain to take the stock to a 3 week high of €143.95 each by 11:00 CET. Renault shares were also on the move in early trading, rising 2.5% to €80.01 each while PSA Group was seen 1.5% higher at €17.63 each.
The region-wide Stoxx Europe 600 Automobiles and Parts Index was marked 1.42% higher at 550.69, putting the benchmark in positive territory for the year.
VW's Wednesday move extended gains from Frankfurt trading yesterday after the world's biggest carmaker said group operating profits would likely come in at €4.4 billion ($4.7 billion), a 28% improvement from the same period last year if confirmed when the group releases its full earnings statement on May 3.
"The key difference in the Group Operating Result to market expectations relates among others in particular to improvements in the result of the Volkswagen Brand (which came in at around €0.9 billion) in the first quarter, "VW said in a statement published on its website. "Causal factors for the Volkswagen Brand result include the success of new model introductions, particularly the Tiguan, and a strong financial performance in the West European market. Optimized fixed costs also positively affected the result."
Earlier Tuesday, VW China CEO Jochem Heizmann told reporters at the Shanghai Motor Show that overall China sales were likely to increase by between 4% and 5% this year. Last year, VW China sold just under 4 million cars, a 12.2% increase from the previous period that was boosted in part by government incentives.
VW also said last week that it had purchased around half of the 475,000 diesel cars it has agreed to buy in relation to a settlement with U.S. authorities over emissions rigging. VW needs to repurchase or repair at least 85% of those car by 2019.