PARIS (Reuters) - Car sales extended their declines in France, Spain and Italy last month, data showed on Friday, leaving little hope of a European auto market rebound anytime soon.
"The French passenger car market started 2013 on as weak a note as it exited 2012," analyst David Arnold at Credit Suisse said in a note.
Falling sales across Europe suggest manufacturers will have to cut vehicle output by a further 7 percent this year, Arnold predicted, adding to excess capacity that is already inflicting deep losses on volume brands.
European auto sales last year fell the most in two decades to hit a 17-year low, as austerity-squeezed household budgets and rising unemployment discouraged big purchases.
Cautious hopes for a broader euro-zone economic recovery have yet to filter through to the car market.
In Germany, where growth turned negative last May, car sales figures to be released on Monday are expected to show a further monthly decline.
Renault's domestic registrations fell 7.4 percent, holding up better than the market thanks to a 9.9 percent gain for its low-cost Dacia brand, as scarce buyers gravitated to "crisis cars" such as the no-frills Sandero compact and Duster SUV.
Struggling French rival PSA Peugeot Citroen
Without the benefit of recent updates to the Renault Clio and Peugeot 208 small car - Europe's December bestseller in the category - the numbers would have been even grimmer.
"Demand is still very weak for small and medium-sized cars and minivans," said Francois Roudier of the CCFA industry association.
The Volkswagen group recorded a 23.9 percent drop in French car sales, a decline accentuated by its strong sales performance at the start of 2012.
The Americans also fared poorly in France, with combined registrations by General Motors'
In all three markets, Ford
VW, Peugeot and Toyota <7203.T> lost ground in Italy, where incumbent Fiat's
In recession-hit Spain, where unemployment stands at 26 percent, monthly registrations fell 9.6 percent despite support from sales subsidies of 2,000 euros ($2,700) per car reintroduced in October by the government and industry.
Peugeot's Spanish tally shrank by more than one-third in January, while the core VW brand fell one-fifth.
But a sales surge by Fiat's retro-styled 500 model delivered a 14.7 percent gain for the Italian brand in Spain. Renault Clio sales also doubled with the model update, helping the French nameplate to a 5 percent increase overall. ($1 = 0.7367 euros)
(Additional reporting by Clare Kane in Madrid and Gilles Guillaume in Paris; Editing by Helen Massy-Beresford and David Holmes)
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