Citroen expects car sales in Spain to fall by 8% this year amid hopes that the market will recover in the second half - offsetting a 15% sales drop in the first quarter - on the back of government action to stimulate consumption in Spain's slowing economy.

On Friday, the government announced it would invest EUR10bn to reactivate the economy which is suffering from a property crisis and higher interest rates and is expected to grow just 1.8% in 2008, down from a 3.8% in 2007 and about 4% annually in the past 10 years.

Amid this backdrop, consumers are shying away from big-ticket purchases like cars.

Citroen's forecast is the worst made so far in an industry which overall has estimated sales could decline 3%-4%.

Ivan Castano Freeman