PARIS -- Car sales in western Europe started 2004 on the back foot, dipping 1.6 percent in January amid shaky consumer spending in France and Germany and rattling hopes for a quick recovery, data published on Thursday showed.
Japanese and Korean carmakers, which grabbed market share from homegrown manufacturers in 2003, continued their European assault, boosting sales by more than 20 percent.
Most European carmakers lost market share, although Italy's Fiat, scrambling out of financial crisis, bucked the overall trend to nudge sales slightly higher and boost market share as new models charmed motorists.
Brussels-based carmaker association ACEA said auto sales in western Europe fell to 1,173,273 units in January, down 1.6 percent from the same period a year ago, after falling 1.3 percent as a whole in 2003.
One less working day in all countries except Britain and Ireland contributed to the dip.
"These figures confirm the European market is still far from recovery mode," said Patrice Solaro, autos analyst at Kepler Equities. "Maybe consumer spending will pick up later in the year but for now, that sounds like wishful thinking."
The auto industry, which accounts for about four percent of the European Union's gross domestic product, reflects the wider economy and in particular consumer confidence.
Most economists expect a modest recovery in European economic growth this year unless a strong euro continues to hurt exporters and high unemployment in France and Germany hampers spending.
Many auto industry experts reckon the car market will be slightly firmer in 2004, with recovery tilted toward the second half as consumer morale improves and as smart new models woo thrifty motorists, although some see no growth at all.
The European DJ Stoxx Autos index, which gained 23 percent in 2003, edged up 0.6 percent by 1015 GMT, slightly beating a 0.5 percent gain on the broader market amid some relief the figures were not as grim as already-reported numbers for France and Germany.
"The Japanese figures are impressive, but the overall figure is a bit disappointing," said one London-based analyst. "It's only one month, but this does dent recovery hopes a bit."
Europe's top auto firm Volkswagen, which had been banking on its new Golf to win it market share, and U.S. giant General Motors fared worst, with sales down 10 and 11 percent respectively.
France's PSA Peugeot Citroen, which lost market share in 2003 as competitors pumped out smart new models, also posted a sharp fall in sales in January, as did DaimlerChrysler brands.
ACEA said in a statement the January figures reflected clear signs of recovery in some countries, but continued economic uncertainty in others. Sales in Spain, Italy and Britain all rose, but sales fell in Germany, Europe's biggest market, and France, the region's worst hit major auto market in 2003.
Sales in the United States, the world's biggest car market, fell 0.7 percent in January as cold weather kept consumers away from dealerships despite a strengthening economy and high incentives.