Demand for new cars in recession-bound Europe fell to a 17-year low in 2012.

This leaves the big car companies little hope for this year as they try to cut costly excess factory capacity and aggressive discounting dents their margins.

Registrations data released today also showed the biggest annual drop since a 16.9% downturn in 1993, highlighting the crisis for car makers in Europe.

Consumers are fretting over austerity measures, job security and rising living costs, and those who want to buy new cars are struggling to get credit.

Even Germany's mighty Volkswagen suffered a drop in sales, according to the figures from the European automotive industry association ACEA.

However, South Korean brands Hyundai and Kia, which are making an aggressive push in Europe, proved it is possible to expand sales even during a grim downturn.

Big car makers are cutting jobs in underused plants across Europe, with Renault the latest to announce job losses, following Honda, Ford, PSA Peugeot Citroen and Opel.

New car registrations fell 8.2% to 12.05 million vehicles in 2012, the lowest level since 1995, ACEA reported. Losses in all major euro zone economies, combined with two fewer working days on average, sent European Union registrations tumbling 16.3% last month to 799,407 vehicles, it added.

This marked the worst plunge in 26 months in a row - since October 2010.

The industry tried to satisfy more robust demand for second-hand cars through the self-registrations. Nearly 904,500 vehicles, or 29.3% of the new car market, were registered last year either to car manufacturers themselves or their dealers in Germany, figures from Frankfurt-based Dataforce and the German Federation for Motor Trades and Repairs showed.

Among the worst hit last month were mass-market stalwarts including US carmakers Ford and General Motors, where group sales each fell roughly 27%.

GMT's Chevrolet brand posted an even weaker month than its ailing sister Opel. Even Volkswagen, which was performing better than its peers earlier in the year, saw sales of its core VW brand fall 22%. The December plunge at its luxury brand Audi nearly matched that.

However, Hyundai and Kia remained a rare bright spot as they push out models with styling that has proved popular with buyers, gaining 10.5% and 6.8% respectively. The brands have been gaining ground, helped by a European Union Free Trade Agreement with South Korea, as they build a reputation for affordable small cars with long warranties.

Britain was also a brighter spot where the 2012 market grew 5.3% to a four-year high, helped by self-registrations, aggressive discounting and a wide range of financing deals allowing drivers to pay a fixed monthly cost, eliminating the risk of buying a car outright.