Japanese and Korean car makers are gaining market share at a time when European car sales are in steep decline, Automotive News Europe reported.

The Asians are benefiting from the strong euro against world currencies.

“We’ve probably got to accept that an increasing piece of the market will be lost to those groups if the exchange rates stay where they are,” said John Lawson, analyst for SmithBarney in London.

Sales of Japanese cars rose 0.5% in May in an overall European market that declined more than 5%. Korean car makers were up 9.2%.

The Japanese share in western Europe stood at 12.2% in the first five months of 2003, compared with 11.2% last year. The Koreans moved from 2.7% last year to 3.1% in 2003.

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By GlobalData

All the volume European brands were down as new-car sales in western Europe fell 5.2% to 1.2 million units in May. “It’s the worst numbers since March 1997,” said Lawson.

The 6.9% rise in Germany was mainly due to the withdrawal of a planned tax on company cars. Italy was down 13.5% and France dropped 13.1%.

The rapid decline in the French market was the biggest surprise.

Said Lawson: “That wasn’t foreseen at the start of the year.”