Data released by the European carmakers' association, ACEA, shows that the European car market in August was 3% ahead of the same month last year.

The modest increase reflects the continuing impact of scrappage schemes. The German car market was up by 28.4% in August with cumulative car sales in the first eight months up by 26.6% over the same period last year.

ACEA said that the rising trend in car sales commenced in June after fourteen months of downturn and noted that it is 'mainly reflecting the impact of incentive schemes in a number of markets across the EU'.

Eight months into the year, European car sales are still 8.2% lower than in the same period last year, amounting to 9,565,517 units.

JD Power said earlier this month that the problem the industry will soon have to face is the market volume consequences of 'life after incentives' and that the German market threatens a big swing to decline.

Not only will the 'true' underlying level of car demand begin to emerge in Germany after the scheme ends, but there will be a further negative contribution — in the range of several hundred thousand units — related to payback, after the pull-forward in sales associated with the end of the scheme in September 2009.

JD Power said that while there is some uncertainty relating to the exact timing of the next market plunge in Germany, a plunge 'appears unavoidable' nonetheless. The government has hinted at other forms of support, but these will likely be relatively small in effect compared with the post-incentive market, JD Power noted.

JD Power forecasts that the West European car market - even with the scrappage boost - will fall by just over 2% to 13.25m units in 2009.