Volkswagen's Portuguese factory has cancelled planned temporary layoffs of several days over the next two months, saying it was cautiously optimistic about a recovery in European car sales.

Autoeuropa, which has recently been talking with workers to avoid short-term layoffs, said in a statement cited by Reuters that the recovery, which came thanks to consumer incentives offered by European governments, was mainly in Germany but "has a positive reflection on Volkswagen Autoeuropa orders".

But the anticipated recovery should be viewed cautiously as it is due "mainly to an emergency intervention in the markets with public funds," it said.

"The difficulties have not totally disappeared, but we can face the immediate future with more optimism. Existing orders allow [us] to cancel the four days of lay-offs announced for September and October," the statement said.

But the company said it could not rule out temporary layoffs after October. It had earlier planned 10 days of layoffs between September and December.

Autoeuropa, which makes the Eos convertible, VW Scirocco coupe and Sharan minivan plus the Alhambra variant for Spanish affiliate Seat, halted production completely for 16 days earlier this year and has implemented partial stoppages for some models.

The 180,000-car capacity plant produced 94,100 vehicles last year, little changed from 2007. It built 51,681 vehicles in the first half of 2009.