Is the European car industry out of the woods yet? The figures for January certainly suggest that people across the continent are now willing to invest in new cars.

A 5.2 per cent rise in car sales was experienced across Europe, with all major markets seeing increases – alongside a number of crisis-hit nations. Portugal, Ireland, Italy and Greece saw demand rise for compact cars.

Substantial car sales increases were enjoyed by Volkswagen (+7.6 per cent), Peugeot (+8.8 per cent) and Renault (+3.8 per cent).

Cautious optimism was expressed by manufacturers after the Association of European Carmakers (ACEA) data was revealed. The figures cover the EU and European Free Trade Association (EFTA) areas.

Some voices within the industry are asking how much of the improvement is down to action taken by carmakers and governments, and how much of the growth is organic.

Notable among the figures were Greece which saw a 15 per cent rise, and Portugal which was up 32 per cent in January.

An 8.2 per cent rise was experienced by the Volkswagen Group, a figure which includes Seat, Bentley, Lamborghini and Skoda sales. When we see a breakdown of figures covering the entire group, we see that the smaller, non-VW brands have pulled up overall sales data. Luxury brand Audi rose 8.5 per cent, while economy brand Skoda saw a jump of 10 per cent, boosting the group's overall profit-line.

January saw sales lift 7.6 per cent in the UK and Spain, while German showrooms enjoyed a 7.2 per cent rise. France saw sales grow by 0.5 per cent