Car sales in the European Union slumped to a record low last month, dragged by weak demand in several key countries, including Germany—the bloc's largest market.

Registrations of new cars, a proxy for sales in the EU, excluding Malta, fell 8.7% in January from a year earlier to 885,159 vehicles, "reaching a historic low recorded for a month of January since the start of the series in 1990," according to ACEA, the European automobile manufacturers' association.

In Germany, new registrations dropped 8.6% from the year-earlier month, amplifying woes elsewhere in the region. January registrations were down 15% in France, nearly 18% in Italy, and 9.6% in Spain. Registration gains of nearly 12% in the U.K. and 13% in Belgium weren't sufficient to offset weakness elsewhere.

The figures represent the 16th consecutive month of falling new-car registrations, exacerbating the problem of chronic overcapacity for manufacturers such as PSA Peugeot-Citroën, the region's biggest-selling auto maker after Volkswagen AG, and the European operations of Fiat SpA and Ford Motor Co., each of which suffered heavy losses in January.

Ford, which last fall disclosed plans to close three auto-assembly and parts factories in Europe, saw registrations decline nearly 26% from a year earlier. The Dearborn, Mich.-based car maker said last month its operating losses in Europe this year would hit $2 billion—$500 million more than it estimated only three months ago—on weaker sales than it had forecast.

For General Motors Co., registrations fell 5.5% overall, despite a 4.5% rise at the company's Adam Opel AG unit. GM last week said losses in the region in 2012 more than doubled to $1.8 billion, and said it expects industry sales in the region to decline and remain at 20-year lows this year.

GM has indicated it is considering closing an Opel assembly plant in Bochum, Germany, two years earlier than planned if new labor concessions can't be achieved, and is developing new small cars for the region with struggling Peugeot-Citroën.

Peugeot, which last week reported an annual loss of €5 billion ($6.69 billion)—its steepest to date—saw registrations fall by 16% in January.

Peugeot's French rival Renault SA fared a bit better, posting a 5.6% drop in registrations, helped in part by 8.8% growth at its no-frills Dacia unit.

Fiat posted a 12% drop in registrations, while its Lancia/Chrysler unit saw sales shrink by 32%.

Registrations for Toyota Motor Corp.,the world's largest car manufacturer by sales, dropped nearly 17% in January.

In contrast, most premium manufacturers saw sales rise over the past month.Registrations were up 3.7% for Daimler AG,6.6% higher for BMW AG,while Volkswagen AG's Audi unit posted a 1.9% decline. Volkswagen as a whole saw registrations drop by 5.2%.

Monica Houston-Waesch, Wall Street Journal online here

Please share with others