Fiat said its sales in Italy plummeted 40% in the first three months of this year after government sales incentives ended.

April is looking no better according to Fiat brand chief Lorenzo Sistino, who said: “Based on what we’re seeing so far, the trend is down by double digits.”

Italy’s government scrappage scheme offered EUR1,500 (US$2,000) for trading in an old car for a new model. The programme expired at the end of 2009, and the government has since decided against renewing it.

Fiat CEO Sergio Marchionne last month estimated the European car market could shrink by 15% this year as government incentives run out.