European car sales in reverse

Fiat's Stilo: The Italian carmaker posted the biggest drop in sales in May

BRUSSELS, Belgium -- New car sales in western Europe slumped last month as a weakening market and a slow economic recovery cut into demand.

Fiat and General Motors were the hardest hit by falling sales, while BMW and Japanese carmakers -- led by Toyota -- improved their market share.

Provisional figures for western Europe show new car registrations totalled 1,287,921 units in May, down 8 percent from a year earlier, the European Automobile Manufacturers Association (ACEA) said on Thursday

Within the 15-member European Union, ACEA said sales dropped 7.9 percent year-on-year to 1,249,766 units.

The ACEA said the declines in sales was partly due to fewer working days in some countries in May, "which reflects the stagnation of the market and the slow recovery of the economy."

The fall in May sales was the largest monthly drop in more than a year. It comes as the European car makers face increasing foreign competition in a shrinking market, as consumer demand weakened and the U.S., Japan and German economies slipped into recession temporarily last year.

The ACEA said that during the first five months of 2002, new car sales fell 3.8 percent in western Europe and by 3.7 percent in the EU.

Among the major markets, only the UK showed a strong performance, with new car sales rising 5.1 percent to 208,669 units.

Germany -- which has been hit by strikes in the auto industry -- saw sales fall by 14 percent in May from a year earlier, while Italy was down 11 percent and France posted a 6.2 percent decline.

"Strong internal demand continues to characterise the UK, up while good performances were also posted by two smaller markets, Denmark and Finland," the ACEA said. "All the other countries reported a decrease, ranging from minus 3 percent in Ireland to minus 18.7 percent in Greece."

Italian carmaker Fiat posted the biggest decline in May, falling 22.6 percent from a year earlier, while U.S. giant General Motors saw sales drop 7.3 percent as demand for its Opel model easing in Germany.

Germany's Volkswagen lost 9.6 percent in sales last month and Ford fell 7.9 percent.

Stronger sales were posted by German carmaker BMW, which gained 10.9 percent in May, due to demand for its new Mini car. Japan's Toyota and Lexus, whose combined sales were up 20.3 percent. Other Japanese companies -- such as Mazda and Honda -- were also higher.