Vehicle sales in Spain and France fell again in October sparking further concerns over the auto industry in both countries.

Earlier this week, French ministers warned that suppliers in the country may need help and support from local authorities as vehicle production slows and, in Spain, where October sales hit early 1990s lows, there are worries over the future of an industry which employs 500,000.

Spanish automakers federation (ANFAC) said: “"If the auto market does not recover, Spain will no longer be able to maintain current production levels", noting that a strong auto industry was a major player in the economy overall.

October car sales in Spain totaled 61,366, up from 56,595 in September but down 37.6% from a year earlier to take the market back to levels last seen 15 years ago, according to ANFAC.

Initial figures suggest that individual car purchases, the largest segment of the market, may have fallen as much as 50% in October and ANFAC predicts full year sales of less than 900,000.

Spain’s car sales have been hit by government increases in sales taxes which came into effect in July while a trade in bonus scheme ended.

ANFAC has been warning for several months that problems in the auto industry could have a serious knock-on effect in an economy which has just scraped out of recession this year. Spanish unemployment at around 20% is the highest in the eurozone.

French new car sales were down for the sixth month running in October, falling 18.7% to 171,449 compared with the same month a year ago.

The French trade-in scheme, worth progressively less over the year, will end completely at the end of December having buoyed sales through the worst of the industry slump in 2009.

For the 10 months to October, French vehicle sales are down 1.4% from the same period last year at 1.83m. The total market is expected to reach 2m this year, a fall of 10%.

Earlier new car registration figures showed the German car market continuing to shrink, down 20% after slipping back almost 18% in September.

However the German auto industry association VDA is more optimistic, raising its full year forecast slightly to more than 2.9m.

VDA president Martin Wissmann said he believed the German car industry is pulling out of its sales crisis faster than expected. The association had earlier expected to sell between 2.8 and 2.9m vehicles as sales plunged following the ending of the government scrappage incentives a year ago.

However sales for 2010 will still show a drop of around 23% over last year which was boosted for most of the year by the incentives.

The German motor transport authority (KBA) said 256,775 cars were sold there last month. Sales in the first 10 months are down 26.8% to 2,423,627 units.

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