Ford, PSA Peugeot Citroen and Toyota led European car sales to a new low in January, kicking off 2013 with an 8.5 percent decline, the Association of European carmakers said on Tuesday.

A logo of a Ford car is pictured during a press presentation prior to the Essen Motor Show in Essen Nov 30, 2012.?[Photo / Agencies]

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.

Ford, which is cutting back its European production capacity with three plant closures to stem regional losses, recorded a 26 percent sales plunge to 61,544 cars. Peugeot and Toyota posted the next biggest declines among major automakers, dropping 16 percent each.

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 cutthroat pricing. Most carmakers see the regional market shrinking between 3 and 5 percent in 2013.

Hopes for 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 percent drop in January.

Despite weak demand at home, Volkswagen increased its share of European sales. Its registrations fell 5.5 percent in January, a more modest decline than the market's, as the premium Audi nameplate fell just 2.1 percent.

Its two German luxury rivals proved even more resilient, with BMW brand sales rising 9.4 percent and Daimler's Mercedes-Benz gaining 4.7 percent.

South Korea's Kia also fared well, with registrations surging 7.7 percent, while affiliate Hyundai's sales fell just 2.2 percent.

Italy's Fiat posted a 12.4 percent sales decline, despite a more modest 4 percent drop for the Italian carmaker's namesake brand.

The upscale Alfa Romeo marque, upon which Fiat CEO Sergio Marchionne is building his recovery strategy for the group, saw its European sales collapse 37 percent in January.