Global carmakers are braced for a slide in second half sales as scrappage schemes are phased out and cautious consumers pull back from big-ticket buys in the face of economic uncertainty.
Scrappage schemes have finished already or are winding down in Europe, and carmakers and analysts fear economic worries and tax measures -- like Spain's VAT hike -- could hurt an industry taking tentative steps out of a deep and damaging downturn.
Last month the World Bank said a double-dip recession could not be ruled out in some countries if investors lose faith in efforts in Europe and elsewhere to tackle rising debt levels.
In France, June car sales edged 1.2 percent lower year-on-year, according to data released on Thursday. While France's scrappage scheme is still in place, from July 1, carmakers will get 500 euros, down from 700 euros, to trade in their old vehicles.
That decline meant French six-month sales were up 5.4 percent on the year.
Some carmakers fared better than others, however, with Europe's second-largest carmaker, PSA Peugeot Citroen, posting a 5.6 percent decrease in June sales, while Renault group sales edged 1 percent lower.
Sales of light commercial vehicles, which were not boosted by scrappage incentives, rose 14.9 percent in June, and showed a 10.9 percent increase in the first six months, from a very low base, as businesses that had put off renewing their fleets in the depths of the crisis bought new vans.
IHS Global Insight analyst Carlos Da Silva said the relatively gentle decline in French car sales in June would be unlikely to last.
I think until the end of the year we'll see much steeper declines ... We are anticipating double-digit drops, although not for every month, and a very bad last quarter because mechanically we are comparing a very strong end of the year last year, he said.
Worries over government reforms to reduce deficits and the economic situation in the euro zone would add to the effect of the end of scrappage incentives, Da Silva said.
Incentives and (manufacturer) discounts cannot last forever ... on top of that all the information on Greece, Portugal, here in France the pension reform is not giving them very good signs for the future. Maybe now we'll see a lot of people coming back to saving what they can to see what happens next year.
In Spain, car sales rose 25.6 percent year-on-year in June, the last month affected by the scrappage scheme, although the growth slowed from May's 44.6 percent and carmakers' association ANFAC warned the rise would not last.
In H2 we expect the trend to worsen, with falls of over 30 percent due to the economic situation, the contraction of domestic demand, credit tightening, high unemployment, a 2 point rise in VAT and the end of the Plan 2000E (government subsidies for car buyers), ANFAC said in a statement.
Elsewhere in Europe, Italian car sales data is due for release at 1600 GMT.
U.S. car sales due out later on Thursday are expected to show the pace of recovery slowing, and spark fears the recovery is stalling, analysts said.
General Motors North America President Mark Reuss told analysts on Wednesday that it's still a very delicate recovery.
In Japan, home to Toyota Motor Corp, Mitsubishi Motors Corp
and Nissan Motor Co Ltd, overall auto sales rose 17.4 percent year-on-year in June.
Sales excluding 660cc mini-vehicles were up 20.6 percent., although an industry official said the jump was off a low base, and remained lower than 2008 levels, before the crisis hit.
He also warned that the outlook for demand was shaky for autumn and beyond, after the government's scrappage incentives expire at the end of September.
It's very difficult to get a read on what sales will do in October and beyond, Michiro Saito, an official at the Japan Automobile Dealers Association said.
We know demand will fall, but by how much and for how long are a big question mark, he said.
Elsewhere in Asia, South Korea's Hyundai Motor Co saw an 11 percent increase in overall sales in June, selling 312,388 vehicles at home and abroad, while Kia Motors Corp saw a 24 percent increase.
(Additional reporting by Chang-Ran Kim, Nigel Davies, Suh Kyungmin and Soyoung Kim; editing by Simon Jessop)