Spain’s auto industry has asked the government to extend the Plan 2000E aid programme before it runs out of funds in October.

The scheme, which has helped boost anaemic sales by 20% since its May launch, includes a EUR100m fund to subsidise 200,000 registrations. However, industry observers expect the popular programme will use up all its funds in the next two months, leaving the car industry reeling under Spain’s severe consumer downturn and deep recession.

“Things aren’t going to get better in the second half,” said a director at a major Renault dealer in Madrid, adding that credit remains extremely tight. “They need to extend this plan or sales will probably be worse than earlier predictions.”

Manufacturers’ federation Anfac has forecast cars sales will decline 22.5% to 900,000 units this year though the fallout would have totaled 1m without Plan 2000E.

Still, some industry observers said sales will plummet beyond Anfac’s estimates if the plan is not renewed this autumn.

The Renault dealer added to a chorus of criticism about the plan, saying that not all of Spain’s autonomous regions use it the same way and that there are long delays in dealer refunds. Under the plan, the state offers EUR500 per car while the region contributes another EUR500 and manufacturers EUR1,000, totalling EUR2,000 per car.

However, some regions only offer EUR200 while others like Madrid, don’t offer anything expect a reduction in sales tax.

“Madrid doesn’t include the plan while different regions give whatever they want,” the dealer said. “Also, many dealers are waiting much longer to get refunded than they previously thought. Nothing is homogeneous. The whole thing is a mess.”

Rogelio Luis Mena, a top automobile industry boss at Spanish union UGT, is optimistic 2000E will be extended.

“This is absolutely necessary and five ministries are committed to the industry,” he said. “We are confident they will extend the plan before the end of the year or in early 2010.”