Registrations fell to 918,280 new cars, the Brussels-based industry body said in a statement, the slowest January since its records began in 1990, as austerity measures and unemployment hit consumer spending.
Ford, which is cutting back its European production capacity with three plant closures to stem regional losses, recorded a 26% sales plunge to 61,544 cars. Peugeot and Toyota posted the next biggest declines among major automakers, dropping 16% each.
The slide "confirms a weak start to 2013", Credit Suisse analysts said in a note. "Hopes of an earnings and cash recovery in the second half are misplaced." After falling to a 17-year low in 2012, European car demand is expected to contract further this year, squeezing mass-market brands still harder between excess capacity and cut-throat pricing. Most carmakers see the regional market shrinking between 3 and 5% in 2013. Tentative hints of a broader euro zone economic upturn have yet to percolate to the car industry. Germany in particular is weighing on the outlook. After resisting much of last year's slump, Europe's biggest car market is in sharp decline, extended by an 8.6% drop in January.