Spanish car sales are set to fall next year to just under 900,000 units, leading trades federations have estimated, renewing pleas for the government to launch new subsidies to lift registrations in Europe's fifth largest market.

In a statement, manufacturer and dealership bodies Anfac and Ganvam respectively, said next year will mark the third in which car sales will total under 1m units, bringing the market back to volume levels last seen in the 90s.

They said Spanish manufacturing plants could lose their competitiveness at current production levels and urged the government to renew Plan 2000E to help boost the industry's fortunes.

The forecasts came as the sector reported a 37% plunge in October registrations to 61,366 units, accumulating four months of declines.

Meanwhile, Spanish unions have criticised PSA Peugeot Citroen for failing to use component manufacturers in the Galicia region where the French car maker has one of its largest factories in Vigo.

Spanish union CCOO claimed the company is failing to support local suppliers such as TRW, Intergy and Cop Iberia in favour of other non-regional rivals. Galician suppliers "have been collaborating and meeting all of the company's demands for several years," the union charged, adding it is seeking an "urgent" meeting with PSA.

PSA could not immediately be reached for comment.