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 such as Spain's VAT hike could trip up an industry taking tentative steps out of a deep and damaging downturn.
Italian car sales fell 19.12 percent in June, Transport Ministry figures showed. Half-year sales were 2.9 percent higher year-on-year, foreign carmakers' association UNRAE said, but that masked the real demand trends.
Sales made in the first three months, which in effect were the tail-end of those with 2009 incentives, continue to have, in fact, a considerable weight on the cumulative figure, said Gianni Filipponi, director general of UNRAE, in a statement.
Orders in June were down about 17 percent on a year ago, not quite reaching 150,000, the lowest monthly level since 1998.
Research group Promotor said the second half was expected to be heavily negative.
A moderate recovery in the economy is starting to emerge, but it seems to be primarily pulled by foreign demand ... while demand for consumer goods remains weak in general and particularly weak in the durable goods sector.
The economic crisis ... is primarily hitting families this year, it added, with June car sales to private buyers down 30.45 percent, while those to corporate buyers rose 15.93 percent.
Promotor said its survey of auto concession holders at the end of June showed 59 percent expecting further falls in sales and 94 percent seeing low levels of orders.
Its confidence index for operators in the auto sector fell to 18.40, dangerously close to the minimums touched in 2008.
In France, June car sales edged down 1.2 percent on a year ago, industry association CCFA said. France's scrappage scheme is still in place, but from July 1 drivers get only 500 euros, down from 700 euros, to trade in old vehicles.
Some carmakers fared better than others, with PSA Peugeot Citroen , Europe's second-largest, posting a 5.6 percent fall in June sales, while Renault group sales edged down 1 percent.
French six-month sales were up 5.4 percent on the year.
Sales of light commercial vehicles, for which there were no incentives, rose 14.9 percent in June and 10.9 percent for the first six months, from a very low base, as businesses had put off renewing their fleets in the depths of the crisis.
IHS Global Insight analyst Carlos Da Silva said the 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 ... we are comparing a very strong end of the year last year.
Worries over government reforms to reduce deficits and the economic situation in the euro zone would exacerbate the effect, 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, sales rose 25.6 percent on year in June, the last month of the scrappage scheme, down 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 pct 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.
In Russia, once tipped to overtake Germany as Europe's biggest car market before the crisis slashed demand, incentives and economic recovery boosted sales for Lada-maker AvtoVAZ , whose June sales rose 77 percent.
U.S. car sales being released on Thursday showed gains, but analysts had earlier warned the data might show the pace of the upturn was slowing and spark fears of a stalling recovery.
General Motors North America President Mark Reuss told analysts on Wednesday that it's still a very delicate recovery.
GM's June sales in the U.S. rose 10.7 percent, while Chrysler sales were up 35 percent year-on-year.
Auto sales in Brazil, a major market for Fiat and Volkswagen , fell 12.44 percent year-on-year in June, automobile dealers' association Fenabrave said.
In Japan, home to Toyota Motor Corp <7203.T>, Mitsubishi Motors Corp <7211.T> and Nissan Motor Co Ltd <7201.T>, 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 from a low base, and remained lower than 2008 levels.
He said the outlook for demand was shaky after September 30, when the scrappage incentives expire.
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.
(Additional reporting by Chang-Ran Kim, Nigel Davies, Suh Kyungmin, Ben Deighton and Soyoung Kim; editing by Simon Jessop and Will Waterman)