European car sales dropped for the sixth straight year in 2013, but there were signs of improvement.

The European carmaker's association, ACEA, said sales of new cars shrank 1.7 percent to 11.8 million. That's the lowest level since 1995 and a 26 percent contraction from 2007 sales.

But the full-year contraction was less than automakers had feared at the beginning of the year. ACEA has reported four-straight months of market gains, with a surge of 13.3 percent in December that included better sales in all major markets. Even No. 4 Italy, where car sales have been at 30-year lows, saw sales rise modestly.

The picture for the full year was more mixed. Britain posted a double-digit increase, while Spain had small gains. Sales slumped in Germany, France and Italy.