Sinking consumer confidence in Western Europe is undercutting the gains General Motors Corp. racked up in Eastern Europe's emerging markets earlier in the year, leading the U.S. auto maker to report a 1.9% drop in overall European sales for the first nine months of the year.

GM, which is battling Toyota Motor Corp. for the leading share of global auto sales, faces increasing pressure in Western Europe, where a weakening economy and high fuel and raw-materials prices are depressing demand. GM earlier this week said it will pare production of Opel vehicles built in the region. The cutbacks could cause the company to burn through more cash than planned as it incurs expenses even as productivity decreases.

GM Europe's performance adds pressure for the auto maker at a time when concerns about a miserable U.S. economy and dwindling cash reserves have knocked the company's shares to their lowest point in nearly six decades. Shares of GM continued falling Thursday after declines earlier in the week. Thursday on the New York Stock Exchange, the shares closed down 31%, to $4.76.

This year's sales performance for GM Europe stands in contrast to the first nine months of 2007, when GM recorded an 8% increase on the Continent thanks to sizzling sales in Russia. Sluggish demand in several of Europe's more mature auto markets, including Spain and Germany, more than offset the continued increases in Eastern Europe during the first three quarters of 2008.

'We are facing an unprecedented set of economic challenges due to the global economic crisis,' GM Europe President Carl-Peter Forster said in a statement. 'The credit crisis and inflation from surging oil and commodities prices have seriously hurt consumer confidence.'

GM said that its Western European sales fell about 11% during the first three quarters of the year, while Eastern European sales increased 43%. The Chevrolet brand, which relies on Eastern European markets for sales, posted a sales increase, while the higher-margin Opel brand reported a sales decline.

GM delivered a total of 1.62 million vehicles in Europe between January and September. Sales in Eastern Europe hit 318,245 vehicles, which led the auto maker to a 10.4% market share in the region. GM will report world-wide sales results on Oct. 29.

The decline in Western Europe comes just as the region appeared to be getting back into black ink after billions of dollars and several years worth of restructuring.

On Wednesday, foreign auto makers selling vehicles in Russia collectively reported a 22% sales increase in September, but GM's Chevy brand and Ford Motor Co.'s Ford were the only two of five foreign brands to register declines. Chevy fell 2%, while Ford sales slipped 13%, according to the Association of European Businesses.

John D. Stoll