Japanese and Korean automakers are gaining market share at a time when European car sales are in steep decline.
The Asians are benefiting from the strong euro against world currencies.
Weve probably got to accept that an increasing piece of the market will be lost to those groups if the exchange rates stay where they are, said John Lawson, analyst for SmithBarney in London.
Sales of Japanese cars rose 0.5 percent in May in an overall European market that declined more than 5 percent. Korean automakers were up 9.2 percent.
The Japanese share in western Europe stood at 12.2 percent in the first five months of 2003, compared with 11.2 percent last year. The Koreans moved from 2.7 percent last year to 3.1 percent in 2003.
All the volume European brands were down as new-car sales in western Europe fell 5.2 percent to 1.2 million units in May.
Its the worst numbers since March 1997, said Lawson.
The 6.9 percent rise in Germany was mainly due to the withdrawal of a planned tax on company cars. Italy was down 13.5 percent and France dropped 13.1 percent.
The rapid decline in the French market was the biggest surprise. Said Lawson: That wasnt foreseen at the start of the year.