That’s the finding of the latest analysis from JATO Dynamics, which shows that registrations in the European new car market declined by 9.8% in Q1 compared to the same quarter in 2012 and by 10.2% in March.

The firm’s data shows that four of the “Big Five” markets reported a drop in new car sales compared to the same period last year.

Germany, which is historically the one of most resilient of the European markets, shows the largest fall in new car sales of the group, down 17.1% on March 2012 and down 12.9% on the quarter. Local economists are reporting “no growth during the first quarter in Germany”, which has led to consumers being more cautious than normal during this period. They are however, expecting to see signs of improvement by mid-year.

Great Britain remained the strongest performer of the key European markets in 2013, with new car sales for the quarter up by over 40,000 units compared to the same period in 2012. The quarter has been boosted by an increase in private new car sales and the bi-annual registration plate change that shapes the market in March and September. Concerns surrounding the "unlucky" 13-registration plate have not upset the market as some initially thought it might.

Looking at the brand performance, most manufacturers continued to struggle due to the on-going economic uncertainty. BMW was the only brand to record an increase in Q1 sales compared to last year, with new car sales up 0.5% on 2012 because of increasing sales of the 3 Series in Belgium and the 1 Series in the UK. In March, Fiat saw some success with the recently introduced 500L mini-MPV model and ended the month with a sales increase of 8.0%. However, this was not enough to improve on last year’s brand performance, and Fiat ended the quarter 0.2% down compared to the same period last year.

Although 50% of Fiat’s 500L sales have been in its home market, it was not enough to lift the Italian new car market, which finished the quarter with sales 13.1% below the same period last year. Most of the German brands have also experienced a difficult start to the year. Volkswagen, Audi and Mercedes all suffered a decrease in new car sales in Q1, down 12.7%, 5.7% and 0.8% respectively compared to the same period in 2012. March proved to be a difficult month for Volkswagen with sales falling 14.9% compared to March 2012.

Outside the top ten, there was some positive news as brands such as Dacia and Honda, along with some specialist premium brands like Land Rover and Jaguar, recorded improved sales performances.

Commenting on the findings, Gareth Hession, vice president, research at JATO, said: “’With the majority of the “Big Five” markets struggling, most of the top ten brands are finding it difficult to increase sales, even with the introduction of new models.’

In terms of the top 10 models, Renault’s new fourth-generation Clio, the new Peugeot 208 and BMW’s 3 Series are the only models in the top 10 recording improved sales both for the month of March and Q1 2013. The 208 performed particularly well last month, because it is now more widely available compared to last year, with sales up over 23,000 units on March 2012. As a result of strong sales in Belgium, Germany, Italy and Spain, the B MW 3-Series saw a 30.9% increase in sales at the end of the first quarter.

Although the Volkswagen Golf remains the most popular car in Europe, its sales continued to fall. Ford’s Fiesta holds on to second place in the top ten and remains the market leader in Great Britain, following its recent facelift and the addition of a 1.0 EcoBoost turbo petrol engine. The popular Volkswagen Polo has dropped to seventh place with sales down 23.6% in March and 21.5% at the end of the quarter.

Outside of the top ten models, the new Toyota Auris is making a big impact on the market with sales up 26.5% in March. New and updated models including Kia cee’d, Mercedes A-Class, Opel/Vauxhall Mokka, Ford B-MAX and Volvo V40 also recorded strong sales.

Mr Hession concluded: ‘Europe continues to be a difficult market for most brands but it is important to recognise the appeal of new products, premium brands and crossover vehicles even in challenging economic circumstances. The success of new models from Fiat, Renault, Peugeot and BMW are proof that brands need to stay innovative and exciting to sustain sales.’