Dec. 14 (Bloomberg) -- European monthly car sales fell 1.1 percent in November, led by Volkswagen AG, Toyota Motor Corp. and General Motors Corp., as higher gasoline prices and rising borrowing costs discouraged buyers.

New car registrations declined 1.1 percent last month to 1.25 million vehicles from 1.27 million a year earlier, the Brussels-based European Automobile Manufacturers Association said today in a statement. Sales for the first 11 months of the year gained 1.1 percent to 14.8 million vehicles.

Gasoline prices in October were up 8.9 percent from a year earlier in the 13 countries that share the euro, the biggest contributor to the area's 2.6 percent annual inflation rate for the month, the European Union said Nov. 15. Consumer confidence is at a 20-month low in the region, according to figures released two weeks ago. Interest rates charged by banks for loans in the euro countries were at a seven-year high yesterday.

``Consumer confidence is slipping in most of the major markets,'' Michael Tyndall, an auto industry analyst with Nomura Securities in London, said. ``It's a reflection of the higher interest rates, rising fuel prices and, more recently, tighter credit.''

Sales by Wolfsburg, Germany-based Volkswagen, Europe's largest carmaker, fell 7.2 percent to 255,825 vehicles. The decline was sharpest at the namesake brand as customers waited for new models such as the Tiguan compact sport-utility vehicle, the Golf hatchback and remake of the Scirocco sports hatchback.

Toyota's Decline

Purchases at Toyota, the world's second-largest carmaker, dropped 6.5 percent to 66,050 vehicles. The Toyota City, Japan- based carmaker's European market share declined to 5.3 percent from 5.6 percent. Registrations in the region by Detroit-based General Motors, the world's largest automaker, fell 5.2 percent to 122,696 vehicles.

Sales in Germany, Europe's largest market, plunged 13 percent in November. A sales-tax increase that took effect in January in the country has hurt sales all year, and German consumer confidence is at the lowest in almost two years.

Inflation in France last month accelerated by the most since July 2004, and Italy's inflation rate was at a two-year high.

Eastern European Gains

The carmakers association figures include 25 of the European Union's 27 members, plus Iceland, Norway and Switzerland. Demand in eastern Europe rose 12 percent, in contrast to a 2.1 percent drop in the west.

``Europe for the auto industry is a divided continent,'' said Stephen Pope, chief global markets strategist at Cantor Fitzgerald in London. ``In the developed west, an import from the U.S.'' has been the practice of ``financial incentives to promote sales via discounts and interest-free deals. Now, as the impact of the subprime crisis spreads out, sucked like ink into blotting paper, the ability to offer financing deals is restricted.''

European registrations at Paris-based PSA Peugeot Citroen, which ranks second in the region, declined 2.1 percent in November to 156,634. Stuttgart, Germany-based Daimler AG, the world's second-largest maker of luxury vehicles, posted a 3.9 percent decline to 70,600 units on an 8.8 percent drop at the main Mercedes-Benz brand.

Renault SA, Fiat SpA and Bayerische Motoren Werke AG posted sales gains as the carmakers attracted customers with new models.

Boulogne-Billancourt, France-based Renault, Peugeot's smaller domestic rival, recorded an 11 percent gain in European sales to 113,958 vehicles, led by a 64 percent jump at the Dacia division in Romania to 17,581 cars. The division makes the Logan car, a model priced as low as 7,200 euros ($10,500) in Germany.

BMW, the world's biggest luxury-car maker, posted a 17 percent increase to 73,531 vehicles, led by a 54 percent jump in sales of a new version of the Mini small car. European sales at the main Munich-based BMW's namesake brand rose 11 percent, helped by the new X5 SUV.

Fiat's deliveries rose 2.6 percent to 99,358 vehicles on demand for the Bravo compact, which has been available since February, and the Grande Punto and Panda models. The Turin, Italy-based carmaker's European market share increased to 7.9 percent from 7.7 percent. Fiat's European sales have risen 23 months in a row.

To contact the reporter on this story: Chad Thomas in Berlin at cthomas16@bloomberg.net; Evan Roth in Paris at eroth4@bloomberg.net.

Last Updated: December 14, 2007 06:34 EST