European Car Market Skids 4.9% In May; Incentives Cushion Fall

European new-car registrations last month skidded by 4.9% year-on-year, but Germany's Volkswagen AG (VOW.XE) and Italy's Fiat SpA (F.MI) saw demand rise as scrapping incentives fueled sales of smaller cars.

New-car registrations in Europe dipped to 1.27 million vehicles in May, the 13th consecutive month of shrinking demand, despite successful scrapping initiatives in several major markets cushioning the fall, the European Automobile Manufacturers Association, or ACEA, said Tuesday in a statement.

May counted on average one working day less across the region.

Volkswagen, Europe's largest automaker by sales, posted a 3.1% rise on the year to 278,933 new-car registrations, which mirror sales, thanks mainly to a 9.2% increase at its core VW brand. Fiat eked out a 2% rise last month to 116,243 cars in Europe.

The other major automakers faced contracting sales in Europe in May.

General Motors Corp.'s (GM) troubled European division last month suffered a 10.8% fall on the year to 118,602 new-car registrations as a 3.9% rise to 17,295 registrations at the Chevrolet brand failed to offset a 9.6% fall at Opel/Vauxhall to 98,935 cars.

Company Web site: www.acea.be

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]