Ammon News - AMMONNEWS -German top-of-the-range carmakers Audi and Mercedes-Benz on Friday reported record sales in 2015, even holding their own in China despite difficult market conditions.

Mercedes-Benz, flagship brand of Daimler, indicated that it sold 1.872 million vehicles worldwide last year, an increase of 13.4 per cent over the previous year.

Rival Audi, the high-end brand of embattled auto giant Volkswagen, said it sold 1.803 million cars, up 3.6 per cent year-on-year.

"Last year, we sold more cars than ever before," said Daimler Chief Executive Dieter Zetsche.

"We were able to increase our unit sales in all three core regions — Europe, NAFTA [North American Free Trade Agreement] and Asia-Pacific. And with 373,459 units sold, China developed into our biggest individual market worldwide in 2015. With growth there of 32.6 per cent, Mercedes-Benz grew significantly faster than the overall automobile market," Zetsche added.

Daimler said Mercedes-Benz launched more than 15 new or updated models in China last year, where it also expanded the dealer network to approximately 500 dealerships.

Local production capacities were also expanded.

At Audi, which has been affected by the massive pollution-cheating scandal that has engulfed its parent company VW, sales growth was more modest.

"2015 has proved that Audi is solidly on track and that we are able to master a year that presented various challenges very successfully," said Chief Executive Rupert Stadler.

In China, Audi's sales slipped by 1.4 per cent to 570,889, but the level was still "very high", Stadler insisted.

"Over the course of the next months, [we] will introduce various new models throughout our Chinese product portfolio: by the summer of 2016, successors will be launched for models that represent around 60 per cent of total Audi sales in China," Audi said.

Embattled German auto giant Volkswagen (VW) Friday posted its first in sales in over a decade, as it struggled to recover from a massive pollution cheating scandal.

Sales of vehicles bearing the Volkswagen badge fell 5 per cent to 5.82 million, the company indicated, marking the first such decline in 11 years.

Overall VW group sales, which also include brands like Audi, Porsche and Skoda, reached 9.93 million, 2 per cent less than a year ago and the first fall since 2002.

"Almost 10 million vehicles sold, that's an excellent result given a difficult situation in certain regions and for diesel in the last quarter," said Chief Executive Matthias Mueller.

He acknowledged that challenges await in 2016, and said the company needed to be "more efficient for a successful future".

Volkswagen sank into its biggest crisis over its stunning revelations in September that it had fitted 11 million of its vehicles with devices designed to cheat pollution tests.

Last week, the US government said it was sueing VW for $20 billion (18 billion euros) in civil penalties.

Mueller is travelling to the United States where he will attend a media reception in Detroit on Sunday.

He has vowed to press on with the company's diesel marketing offensive in the US despite the government lawsuit.

Separately, industry experts said on Thursday that Europe's second biggest auto market Britain recorded its highest ever car sales in 2015, but the continent will likely need a continued recovery in southern European markets to drive growth this year.

Western European new car registrations rose 9 per cent to 13.2 million in 2015 based on national data and estimates compiled by LMC Automotive, with cheap credit boosting British sales.

However, Britain's Society of Motor Manufacturers and Traders forecast 2016 registrations would be roughly flat, and analysts predicted western European growth would need to come largely from further recovery in Mediterranean countries.

"We're going for 5 per cent growth [in western Europe in 2016] and that's largely focused in southern Europe and partly in France," Exane BNP Paribas analyst Dominic O'Brien told Reuters, citing Italy and Spain as key growth areas.

The two countries recorded the biggest rises among the five major western European markets last year, with Italian sales up 16 per cent and Spanish sales up 21 per cent, according to LMC.

Spain's economy has shown signs of a recovery over recent months, though an inconclusive election result in December could jeopardise growth. Italy's economy also improved in 2015.

O'Brien said French carmaker Renault and Germany's Daimler were likely to be among the best performers this year.

"You've still got quite good sales momentum at [Daimler-owned] Mercedes... and Renault are launching new cars in new segments at the moment," he said, pointing to the new Megane and Scenic models due this year.

In Britain, cheap credit, rising consumer confidence, falling unemployment and low inflation all helped to bolster sales, which rose 6.3 per cent to 2.63 million in 2015, beating a previous record set in 2003.

But most economists polled by Reuters expect the Bank of England to raise interest rates in the second quarter of this year for the first time since before the financial crisis, making it more costly to meet repayments on car purchases.

Sales of Volkswagen-branded cars in Britain, which fell 10 per cent in October and 20 per cent November in the aftermath of firm's diesel emissions test cheating scandal, recovered somewhat in December, recording a fall of 0.4 per cent.

VW brand Seat performed the worst of the German carmaker's major brands last month, falling 46 per cent, ending the year down 11 per cent.

Evercore ISI analyst Arndt Ellinghorst said there was less loyalty to the formerly Spanish brand, forecasting Seat's western European sales would be flat or fall next year.

However, he predicted VW group sales would rise 2 per cent, with the namesake VW brand seeing some difficulties at the start of the year but ending it flat due to strong customer loyalty.

"The VW brand behaves amazingly strongly but... there are still going to be some hiccups at the beginning of the year because you will still see the cancelling of orders from fleet for instance will only impact registrations early this year."