European Union car sales rose in April for the first time since September 2011, adding to signs that the 27-nation bloc’s recession may be short-lived.

Registrations of new passenger cars in the EU increased 1.7 percent from the year-earlier period to 1.04 million vehicles, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said Friday. Four-month sales fell 7.1 percent to 4.03 million vehicles.

Consumer confidence in the EU increased in April to the highest level since July, and a gauge of the financial situation of households showed a similar improvement, according to the European Commission. The region also had two more working days on average than in the same month last year, “which would account for the increase,” the ACEA said.

Hopefully the worst is over,” said Hans-Peter Wodniok, an analyst at Fairesearch GmbH in Kronberg, Germany. “For the rest of this year, the market will probably be less negative than it was before,” with “no more dramatic falls” in the southern part of the region, he said.

Volkswagen AG rose 3.7 percent in Frankfurt to close at 168.40 euros, while Daimler AG gained 3.9 percent to 49 euros.

Friday’s car-registration data followed the EU’s March trade report on Thursday, which showed exports up a seasonally adjusted 3.4 percent from a month earlier to 148.9 billion euros. The EU trade surplus widened to 8.1 billion euros from 1.6 billion euros in February. 

Continental AG, Europe’s second-largest auto-parts maker, said this week that it will maintain investments in 2013 at last year’s level as global production of cars and light trucks rises 2.5 percent. Spending will be focused on expanding tire plants in the U.S., Russia, China and Brazil, Chief Executive Officer Elmar Degenhart said.

The encouraging data from Europe contrasted with India, where Prime Minister Manmohan Singh’s latest skirmish with corruption risks setting back efforts to spur growth, worsening a legislative logjam under a government set to pass the fewest bills ever in a full term.

The U.S. economy will continue to recover until at least 2015 without tumbling into a recession, achieving the sustained growth that has eluded it since the last slump ended four years ago, according to a Bloomberg poll.

European car sales last month were helped by the most of the Easter holiday shifting to March this year from April in 2012. The decline may resume for the rest of this year, though at a slower rate than in the earlier months, according to estimates by IHS Automotive Research.

Auto sales in Germany, Europe’s biggest economy, rose 3.8 percent in April, ending five months of drops. Registrations surged 15 percent last month in the U.K., the only car market of Europe’s top five to grow in 2012, and 11 percent in Spain. French auto sales fell 5.3 percent and demand in Italy dropped 11 percent.

“The recovery of sales in Germany is positive and may be an indication that consumers are getting back into the market on signs that austerity in Europe may be close to an end,” Gian Primo Quagliano, head of automotive research company CSP in Bologna, Italy, said before the ACEA released figures. “When the car market changes direction, the reason is never just related to technical calendar effects.”

Daimler posted an 11 percent increase, while Volkswagen saw registrations rise 9.9 percent to 274,925 units, for a 27 percent market share. Sales at PSA Peugeot Citroen, the region’s second-biggest auto manufacturer, dropped 10 percent in April.

Registrations in the EU plus Switzerland, Norway and Iceland increased 1.8 percent in the period, the ACEA said. The EU survey doesn’t include data for Malta.

Still, the number of new passenger cars registered in April was the third-lowest for the month since the data series began in 1990, ACEA said.

The EU is in a recession after the economy contracted 0.1 percent in the first quarter of this year and 0.5 percent in the previous three months, according to the bloc’s statistics office in Luxembourg.

EU leaders have been signaling that they plan steps to revive growth following government austerity measures to counter the sovereign-debt crisis. They gather in Brussels for talks on May 22. The European Central Bank this month cut its benchmark interest rate to a record low of 0.5 percent and ECB President Mario Draghi said borrowing costs may be reduced further if the economic outlook deteriorates.

“Auto demand should benefit from credit easing” by the ECB, Andrew Garthwaite, an analyst at Credit Suisse, said in a report today. “The current level of confidence is consistent with auto sales some 14 percent above current levels,” said Garthwaite, who raised his recommendation on auto-industry stocks to overweight from benchmark, the equivalent of hold. 

(Bloomberg)