Fiat, Renault and Peugeot Gain More than 11% in Bloomberg Europe Auto Index image

Fiat, Renault and PSA Peugeot Citroen have advanced more than 11% in the Bloomberg Europe Auto Index.

Analysts predict that auto sales in Europe will begin to recover from the second half of this year, which made Peugeot gain 18% since March 4th, Fiat 15% and Renault 11%.

“If you know the first half will be lousy and the second a little better, now is the time to buy auto shares,” said Florent Couvreur, an analyst at CM-CIC Securities.

Although auto sale sin Europe are expected to drop for the sixth consecutive year, analysts also predict that a slight recovery will be seen in the last six months. In January new vehicle registrations dropped 8.5%, the lowest level for the month since 1990 when ACEA began tracking sales.

Shares of the three automakers have also increased after the labor agreements at Renault and Fiat. Peugeot’s restructuring plan includes the elimination of 11,200 jobs in France and the closing of a factory near Paris, while Renault has recently got approval from three labor unions to move forward with its plan to cut 7,500 jobs in France and freeze salaries, increasing the company’s chances to smoothly carry out its cost-reduction plan.

“The fact that Renault struck a deal with its unions indicates that Peugeot may do the same,” said Xavier Caroen, a Paris-based analyst at Kepler Capital Markets.