FRANKFURT -- New-car sales in western Europe fell 2.6 percent last month, the worst October in nine years, as a weak British market outweighed fierce discounting and a wave of new models, according to industry data on Wednesday.
A slowing economy, higher interest rates and rising fuel prices led to a 10.8 drop in sales from a year ago in the U.K., the second-biggest European market, while a haulers strike in Spain delayed deliveries and disrupted production.
Breaking a four-month run of rising sales, new-car registrations across central and western Europe fell to 1.16 million vehicles, even though Germany -- Europe's biggest market by far -- grew again despite one fewer shopping day.
The October decline brought 10-month sales across Europe to 12.98 million units, 0.3 percent below the same 2004 period.
Sal Oppenheim analyst Patrick Juchemich said he would not be surprised to see western European car sales dip this year before impending tax changes in Germany help boost turnover in 2006.
His bank recommends caution on car stocks given tough year-ago comparisons in the fourth quarter and weak orders in October, but added that exchange rates remain a wild card.
"If the dollar enjoys a further rally this might change the whole picture," he said.
Most Asian carmakers turned in solid numbers. Registrations for South Korea's Kia Motors rose nearly 18 percent in October and almost 53 percent in the year to date, cementing its role as the fastest-growing brand in Europe.
Suzuki Motor Corp. registrations swelled by a third and Honda Motor Co. Ltd. gained 17.6 percent last month, but Nissan Motor Co. Ltd. sales fell by a third.
Nissan blamed the drop on the slowdown in Britain, its biggest European market, and a shift to retail from fleet sales.
Volkswagen bucked the trend with a 2.9 percent rise in registrations to secure a 21-percent market share.
Stuttgart-based premium carmaker DaimlerChrysler also extended its rebound as a strong showing at Mercedes-Benz offset weaker sales at its Smart minicar brand.
But BMW had a rare stumble. October registrations fell almost 8 percent, in part due to tougher comparisons with last year, when the arrival of its 1-series compact car and the 2.0-liter diesel version of its X3 SUV sparked an increase in sales.
Registrations at struggling Fiat retreated 5.3 percent, with the Fiat brand down 3.4 percent even though October was the first full month of sales for the crucial new version of the Punto, its most popular model.
A Fiat source noted this was an improvement from September and that it had 44,000 orders for the Punto since its launch.
French carmaker Renault saw its registrations drop 11.5 percent even though it launched its new mid-size Clio III -- voted European car of the year this week -- in September.
U.S. carmakers that are depending on Europe to take up the slack of their weak domestic market had a disappointing month. General Motors' registrations fell 6.1 percent while Ford Motor Co.'s numbers eased 1.6 percent.
Data from Brussels-based ACEA showed registrations in the 15 older EU members plus Norway, Switzerland and Iceland slipped 2.6 percent in October to 1.11 million units, leaving sales in the first 10 months up just 0.3 percent at 12.37 million cars.
To help fuel demand, GM's Chevrolet brand is offering buyers free winter tires, annual inspections or fuel coupons. Customers in Germany who buy a Smart ForFour model from DaimlerChrysler's small car brand can also get free fuel.
Higher unit sales do not necessarily translate into increased profits for carmakers given chronic overcapacity that puts pressure on prices.
Slack sales this year have pinched carmakers already struggling with the strong euro and high prices for raw materials that keep dragging on margins.
While oil prices are off this year's record highs they remain a concern for motorists, which hurts consumer confidence and restricts spending power.
Automakers are trying to counter these headwinds by slashing costs, increasingly by cutting thousands of jobs.