Western Europe's car manufacturers have seen sales increase by just 1.2 per cent from a year ago.

New data released by the Association of European Auto Manufacturers show that only 1.24 million new vehicles were registered in May.

Of all the European car markets, Germany has shown the worst recent performance, sales in May 7.3 per cent down on the yearly average.

Figures do show that January-May sales were 2.8 per cent higher than those concluded at the same stage in 2003.

Nevertheless, the news from Europe's largest automotive market is likely to prove depressing reading for the industry, which has been holding out hopes of a recovery from a long-term slump in demand.

The association attributed the slowdown to some extra public holidays which may have skewed results, but acknowledged that "stagnating consumer confidence in some countries" had had an impact.

Among the major car companies in the 15 former EU states, Fiat SpA was one of the best performers, reporting a 4.4 per cent drop in business.