New car sales across Europe fell last month, confirming the credit crisis is hitting carmakers hard.

March was the worst month for sales in four years, with drop of 9.7% (175,738 units) compared to the same month last year, according to Jato Dynamics.

“It’s disappointing to see such a large percentage drop during March but it’s hardly surprising in view of the difficult economic climate that is prevailing in some of the core European markets”, says Nasir Shah, global business development director at Jato.

“Additionally, the March market wasn’t helped by the early arrival of the Easter holiday and the corresponding reduction in available trading days.”

Thanks to the relatively strong market in the first two months of the year, the year-to-date figures are more favourable, with the market down only 1.9% (81,238 units) on last year, to total year-to-date sales of 4,093,307 units.

“In some respects the March figures are greater than they might otherwise have been thanks to the UK’s registration plate change during the month,” said Mr Shah.

“This is a peak sales month in the UK and always has the effect of inflating the March figures in Europe.”

Volkswagen continues its dominance of the European market, heading the sales league in both March and year-to-date, ahead of Ford, Opel/Vauxhall, Renault and Peugeot.