European passenger car registrations fell 8.5 percent in January to their lowest total for the month since 1990.

Ford, PSA/Peugeot-Citroen and Toyota had the steepest declines while Opel/Vauxhall, flush with new product, and rapidly rising Kia bucked the downward trend, along with most premium brands.

Registrations in the EU and EFTA markets declined to 918,280 last month compared with the same month in 2012, industry association ACEA said today.

Ford sales were down nearly 26 percent, PSA's volume fell 16 percent and Toyota sales, including Lexus, decreased by 16 percent.

Boosted by the hot-selling Mokka subcompact SUV, Opel/Vauxhall sales increased by 4.3 percent during the month, which also saw the brand launch the Adam minicar. Kia's volume grew by nearly 8 percent while sister brand Hyundai's sales declined by about 2 percent.

VW gains share

Volkswagen Group, Europe's biggest automaker by sales, increased its market share to 24.4 percent, up from 23.6 percent, even though its volume fell 5.5 percent. All its brands except Seat had sales declines. Audi, Seat and Skoda boosted market share while VW brand lost share.

Renault Group's 6 percent decline was limited by an 8.5 percent rise in sales at its low-cost Dacia brand while the Renault brand's volume dropped 10.5 percent.

Fiat Group sales dropped more than 12 percent. The core Fiat brand limited its sales decline to 4 percent but Alfa Romeo, on which Fiat CEO Sergio Marchionne is building his recovery strategy for the group, saw sales collapse 37 percent while Lancia/Chrysler was down 32 percent.

Premium brands BMW, Mercedes-Benz and Jaguar Land Rover all reported sales increase during the month.

German market weak

After falling to a 17-year low of 12.5 million units in 2012, European car demand is expected to contract further this year, squeezing mass-market brands still harder between excess capacity and cutthroat pricing. Most automakers see the regional market shrinking between 3 percent and 5 percent in 2013, resulting in a sixth straight year of declining sales.

Hopes for a broader euro zone economic upturn have yet to filter through to the car industry. Europe's biggest market, Germany, which resisted much of last year's slump, is in sharp decline, registered an 8.6 percent drop in January car sales.

David Arnold, a sales specialist at Credit Suisse in London, said: "Germany was a market that was pretty resilient hitherto. Falling sales levels in 2013 will put further pressure on all players."

Peter Fuss, a partner at Ernst & Young consulting's Global Automotive Center in Frankfurt, said that the uncertainty in Europe is affecting consumer confidence in Germany. With unemployment among young people as high as 50 percent in some European countries, he wonders who will buy a car in those conditions? "The change in the market is structural," he said.

Gian Primo Quagliano, president of Promotor automotive research group in Bologna, Italy, said: "The sales crisis has spread from southern countries to the rest of Europe, and no one is immune. Until confidence rises, we won't have any inversion in the trend."

UK bucks trend

Registrations dropped 15 percent in France, 18 percent in Italy and about 10 percent in Spain. Car sales in the UK, which overtook France last year to become Europe's second-biggest auto market, rose more than 11 percent.

Gareth Hession, head of research at analyst JATO Dynamics, said: "The new year has not seen any renewed demand for new cars in much of Europe. The market remains challenging and highly competitive."