EUROPEAN car sales hit their lowest level for the month of May in 20 years as the region's recession dragged on, the European automakers' association said yesterday.

Passenger car sale demand for May dropped by 5.9 percent on the same month last year in the 27-country European Union to 1.042 million units, the lowest level since May 1993 when sales dropped below 1 million, according to new figures released by ACEA. For the first five months of the year, sales dropped 6.8 percent to 5.07 million units.

The results come after April offered a brief respite, with a slight increase in sales due to an extra two work days compared with a year earlier.

IHS Automotive analyst Carlos da Silva, nonetheless sees the situation in Europe stabilizing.

"After five months, the situation remains tense," da Silva said. "Yet, for the second month in a row the rate of decline is slowing down. This means that sales are stabilizing trend-wise."

The economy of the 17 European Union countries that use the euro shrank by 0.2 percent in the first quarter of this year - the sixth such decline in a row - and unemployment is at 12.2 percent. Meanwhile, the wider 27-country EU has also seen its economy slide into recession, shrinking 0.1 percent in the first three months of 2013.

Europe's recession has hit carmakers especially hard, as consumers put off purchases of expensive items like vehicles due to rising unemployment. Automakers have announced factory closures and put off new car launches in a bid for survival and to return struggling European operations to profitability.

Even in Germany, Europe's strongest economy, car sales dropped 9.9 percent in May. In Europe's other leading car markets, the picture was also bad: Italy was down 8 percent, France saw a 10.4 percent drop, and Spain was off by 2.6 percent. Britain was the only major car market to post growth, up 11 percent.

The head of Italy's association of foreign carmakers, Romano Valente, urged the government to resist raising the value-added tax on car sales. The tax is scheduled to increase to 22 percent from 21 percent in July. Officials have said it will raise 4 billion euros (US$5.33 billion), but conservative lawmakers claim it will hurt sales of big-ticket items.