UPDATE 1-European car sales rise 5.7 pct in March but VW brand continues to suffer

* Europe car sales continue to rise, helped by incentives

* Demand for SUV’s powers demand in core markets

* VW brand sees sales fall in March

(Adds details, background)

By Costas Pitas

LONDON, April 15 European car sales rose 5.7
percent in March, industry data showed on Friday, helped by
discounts and other incentives, although sales for Volkswagen’s
core brand continued to fall in the wake of the
emissions scandal.

Nearly every European country recorded growth last month,
even though there were fewer trading days than last year when
the Easter holiday fell in April, the data from the European
auto industry association (ACEA) showed.

Italy recorded the strongest rise of any major market with
demand rising 17.4 percent followed by France where sales
increased 7.5 percent, but sales dipped marginally in Germany,
Europe’s biggest car market, and fell 0.7 percent in Spain.

Sales within the European Union have now risen for 31
consecutive months, hitting levels close to those recorded in
2007, shortly before the economic crisis began to hit the car
industry, ACEA said.

The low oil price and cheap credit helped underpin demand
across Europe, PWC said.

Discounts and other incentives remained at “high levels, the
highest in the past five years,” said JP Morgan analyst Jose
Asumendi said.

Overall, registrations in Europe rose to 1.745 million cars
from 1.652 a year earlier, according to data for the European
Union (EU) and the European Free Trade Association (EFTA).

In these markets, sales of VW brand cars, which exclude the
Audi and Porsche brands, fell 1.6 percent in March, according to
ACEA, despite the brand recording its best performance in
Britain, Europe’s second-largest car market, since
September.

By contrast, VW’s mass-market brand rivals Peugeot
, Ford and General Motors’ Opel/Vauxhall
all grew, with sales up 2 percent, 0.6 percent and 6.4 percent
respectively.

In the first three months of the year, registrations in EU
and EFTA markets increased 8.1 percent to 3.932 million vehicles
compared to the same period in 2015, boosted by a 28 percent
rise in demand in Ireland, a 26 percent jump in Portugal.

Analysts at JATO Dynamics said sales of sports utility
vehicles in Europe’s top five markets by sales jumped 22 percent
in March.

(Reporting by Costas Pitas and Edward Taylor, editing by David
Evans and Susan Fenton)

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