New car registrations fell nearly 10 per cent in Europe in March in a troubling sign for both the industry and broader consumer confidence on the continent. In an indication that more European consumers are deferring big-ticket purchases in the credit crunch, mass-market manufacturers all reported lower sales for the month. Most - including Volkswagen, Peugeot, Fiat, General Motors and Ford Motor - reported lower sales for the quarter. The data, reported by the European Automobile Manufacturers' Association (Acea) yesterday, have sobering implications for a sector facing falling sales in North America and tightening legislation on carbon dioxide emissions, projected to cost carmakers billions of euros in coming years. Among large-volume carmakers, quarterly registrations of Toyota's cars fell suffered the sharpest drop, of 17 per cent, followed by Hyundai's, down 15 per cent. Carmakers had been counting on an at worst flat market in western Europe - along with buoyant business in emerging markets such as China and Russia - to help offset the past year's sharp contraction in car sales in North America and chronically weak demand in Japan. But new passenger car sales across Europe fell 9.5 per cent in March and were down 1.7 per cent for the quarter, according to Acea. The body attributed the drop-off in demand for cars in western Europe to "a context of economic uncertainty generated by the US financial crisis". The trade group also noted that the March results had been negatively affected by the Easter holiday, which led to two fewer processing days this year than in 2007. Pete Kelly, senior director for Europe with J D. Power and Associates Automotive Forecasting, said there was a "seasonal element to the numbers", adding: "The market is definitely softening." Eight out of 10 of the new European Union member countries in eastern Europe reported higher year-on-year car sales for the quarter, but nearly half the countries in western Europe posted fewer registrations. In Italy, where Acea said consumer confidence was at its lowest ebb in four years, the number dropped by 10 per cent. In Spain, registrations were down by 15 per cent for the quarter and 28 per cent for March, de-pressed in part by the withdrawal from January of incentives for drivers to scrap older cars. As retailers, banks and other consumer-facing companies have reported large financial losses over the past few months, carmakers have been shielded from the worst of the crisis by their global operations and the nature of their products, which consumers can defer replacing but rarely do so indefinitely. But the latest data suggest the industry may be heading into a prolonged weak patch in one of its biggest markets. Among large, high-volume carmakers, only Renault's quarterly registration figures were higher - by 1.6 per cent - owing to strong sales of cars made by its Romanian Dacia unit. Luxury carmakers BMW and Daimler reported higher quarterly sales of 11 per cent and 4.5 per cent respectively, although Daimler - which makes Mercedes and Smart brand cars - reported a 1.8 per cent drop in registrations in March. Copyright The Financial Times Limited 2008