Seat will reduce will production at its Martorell plant in the first half next year as sales fall and the outlook remains uncertain.

A new temporary Labour Force Adjustment Plan (LFAP) will apply between 2 February and 30 June, additional to the current LFAP, the Volkswagen unit said in a statement.

The temporary LFAP applies seven to 29 non-production days at different production lines.

"The company has been forced to adjust its production forecast for the first half of 2009 to harmonise production volume with expected demand," the statement said.

Regional newspaper La Vanguardia said the company would suspend 5,300 workers' contracts. Martorell had a workforce of 9,700 a year ago, Reuters reported.

The earlier programme begun last month and running until July temporarily lays off around 750 workers and cuts annual production by around 5% or 20,000 cars, the news agency said.

Seat sales in Spain have fallen 24.8% to 96,900 in the first 11 months of the year according to automakers association Anfac, compared with a 26% fall across the sector, a trend which has accelerated in recent months, the report added.