1. According to the European Automobile Manufacturer's Association (ACEA), demand for cars is on the rise in the European Union. Sales of new cars rose by 4.6%, with the higher concentration of more sales at less high-end car companies (such as Ford and Fiat rather than Mercedes-Benz and Audi). Specifically in Britain car sales rose by 8.2%.
http://www.bbc.com/news/business-27442441
2. Economically, this is very good sign for the economic recovery currently in progress. This increase in sales and demand points to people having a better outlook for the future in these countries. Economic conditions are improving somewhat and people are responding by purchasing more items, such as cars. While this is good news, we should not get overexcited because, as Theo Leggett points out, sales are still well below pre-recession levels.
3. The reason that car sales were so low in the first place has a lot to do with the recession caused by the financial crises. The current increase in sales has a lot to do with government subsidies and incentive programs similar to "cash for clunkers" in the U.S. a few years back. This does seem to be the right policy at this moment in time, however policy makers might need to look to the future and be careful that they do not overdue this type of stimulus and cause inflation.
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