Spain's automobile industry - facing a severe sales and manufacturing contraction - is demanding a new used car trade-in scheme to help it survive the country's worse recession in a decade.

Manufacturer's federation Anfac has urged the government to introduce a EUR1,000 programme similar to more ambitious packages recently introduced in France and Germany to spur new car sales. If given the green light, the programme would succeed the hugely popular Prever scheme which the Spanish government axed last year.

The request came as sales were forecast to fall 23% this year after plunging 40% in January. Spain's share of European car manufacturing could fall by a third in 2011 if nothing's done to sell more cars, Anfac claimed.

"The government is aware of our plight," Anfac general manager Luis Valero told a press conference in Madrid. "If they don't help out quickly, we are going to be much worse off."

His comments come as the Spanish government yesterday (5 February) said its Plan Vive aid programme was performing "better than expected."

The scheme offers financial assistance to drivers who trade their used cars (older than 10 years or 250,000km) for a new eco-friendly model.

It has helped sell 6,454 cars or 25% of new registrations so far this year, according to the Spanish  ministry of industry, commerce and tourism.

But the auto industry, which has slammed Vive as insufficient, wants more aid. Apart from a 'new Prever', it wants the state to wave registration taxes and introduce EUR10bn in credit subsidies to help dealers and consumers finance purchases.

The industry and the government are also locked in a dispute over Anfac's decision to shun the upcoming Barcelona motor show next May. The federation and its members, which include the world's biggest brands, won't attend the event unless the state gets serious about its requests.

"We are not in the mood for fairs," Valero said.

Spain, Europe's third-largest car manufacturer, is suffering from its worse economic downturn in a decade.

Ivan Castano Freeman