Car sales in Europe accelerated by 4.5 per cent in June, as vehicle sales stepped up a gear following May’s downturn.

New car registrations in 23 European Union countries, in addition to Norway, Switzerland and Iceland, grew to 1.55 million units, according to figures released by the Brussels-based car industry group ACEA.

Strong growth in Germany - Europe’s biggest market - and solid increases in sales in France and Spain fuelled the growth, it is reported.

In Italy, vehicle sales increased by 18 per cent last month as the market recovered from a transport strike that affected sales in May.

But despite the revival in Europe’s third-biggest car market, Italian manufacturer Fiat saw its registrations drop by four per cent, after feeling the impact of the industrial action by car transport drivers.

Meanwhile, German sports car manufacturer, BMW outpaced the market, while Europe’s largest car producer, Volkswagen increased its market share to 19 per cent.

However, in Britain, car dealers warned that the domestic market is still failing to show signs of a recovery, despite increased sales across Europe.

Sunderland-based firm, Reg Vardy, which runs around 100 car dealerships across the UK, said a four per cent fall in the company’s pre-tax profits for the year ending April 30 reflected a reduction in demand for new cars experienced since May last year, the Scotsman reports.