FRANKFURT, GERMANY - The western European auto market contracted in October at its fastest rate so far this year with consumers were unwilling or unable to buy a new car as the continent slipped into a recession.

Germany's automotive industry association VDA said on Thursday that sales fell 16% in October to 1 million(S$1.9 million) vehicles as the financial crisis continued to wreak havoc across key economies in Europe.

Double-digit percentage declines ranging from 19% in Italy through 23% in Britain to 40% in Spain contributed to the grim figures, the VDA said.

A similar drop of 16% in August drop was partially mitigated by the fact that there were two fewer working days compared with the previous year's month.

Once again, new EU member states in eastern Europe could not sustain their previous growth rates as sales fell 3% to 99,000 vehicles.

"Internal demand has for the moment surpassed its zenith. Most of the countries are battling rising inflation as a result of sizeable wage hikes," the VDA said in a statement.

The overall European auto market slid 15% as a result to 1.1 million units.

In the 10 months to October, western European sales fell 6%.

(Reporting by Christiaan Hetzner; Editing by David Cowell)