Spain’s struggling car industry has made a new plea for the extension of the much-celebrated Plan2000E sales subsidy, arguing that it would help both reduce the country’s high unemployment rate and boost state coffers.

In a statement, leading dealers’ association Anfac said Plan2000E would help save nearly 17,000 jobs and save the government EUR171m in compensation for the country’s 4.6m unemployed.

The pleas came after the government said it would not renew the plan, due to expire in June.

The scheme has been widely praised for helping slow a major sales decline last year and in the first half of 2010. Now industry observers are worrying its removal will trigger a new sales plunge in this recession-hit country.

Meanwhile, leading brands are scrambling to benefit from the final weeks of the current scheme by offering further discounts on top of the 2000E´s EUR2,000-off-the-sticker-price.

Brands such as Fiat, Seat and Hyundai are all offering such incentives, hoping to convince frugal Spaniards to buy their new cars before the subsidies run out.